Therefore, although not all of the unexplained gaps attribute to discrimination, the results of the studies signal gender discrimination, even if these women are highly educated. Human capitalists argue that measurement and data problems contribute to this unexplained gap. Audit or matched pairs studies are done to examine hiring discrimination.
In order to examine racial discrimination, the Urban Institute relied on a matched pairs study. The job position was entry-level. Thus, they matched pairs of black and white men and pairs of Hispanic and non-Hispanic men as testers. The testers applied for the advertised openings for the new positions. In addition, they went through training sessions for the interviews. If both people in the pair were offered the job or if both were rejected, the conclusion was there was no discrimination. However, if one person from the pair was given the job while the other was rejected, then they concluded there was discrimination.
The Institute found out that black men were three times more likely to be refused for a job compared to white men; while the Hispanic men were three times more likely to be discriminated. The percentage for interviews was by 10 percent more for the white testers. Among those interviewed, 50 percent white women were offered the job, while only 11 percent of black candidates received jobs offers. The white testers were also offered higher pay for the same job in cases where the same job was also offered to the black testers.
The pay difference was 15 cents per hour more for the white candidates.
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Furthermore, black women were "steered" toward lower level jobs, while white women were even given some higher-level positions that were unadvertised. A matched-pairs study of homogeneous group audit experiment was done in the restaurants in Philadelphia , United States. Also, the resumes were written in a three-level scale based on the qualifications of the pseudo applicants and resumes for each qualification level were delivered in three separate weeks. The results showed that male applicants were favored significantly.co.organiccrap.com/175458.php
Editorial: Advances in Research on Age in the Workplace and Retirement
Men had higher interview callbacks or job offers. In addition, men did even better in high-pay restaurants compared to low-pay ones. In the low-price restaurants, for each man who received a job offer, the woman was rejected 29 percent of the time. There were no such cases where a man did not get the job offer but a woman did.
In the high-priced restaurants, when the man got an offer, the woman was rejected 43 percent of the time. The same pattern that signaled discrimination was observed for the interviews. At the high-priced restaurants, women had 40 percent less chance of being interviewed and 50 percent less chance of receiving the job. Therefore, based on this study, it is correct to conclude discrimination in the same job may lead to gender wage discrimination. Note the high-priced restaurants are more likely to offer higher wages and higher tips for its workers compared to those with low prices.
Another experiment is the study of the effect of "blind" symphony orchestra auditions by Goldin and Rouse. Thus, only the skills were considered.
In other words, a change occurred. This study tests for discrimination directly. The finding implies there was gender discrimination against woman musicians before the adoption of the screen on identity.
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However, this discriminatory practice was eliminated after the adoption and only qualifications of the individuals were taken into account. Darity and Mason  summarize results of discriminatory behavior observed in other countries on the basis of "correspondence tests". However, the qualifications written in the resumes are comparable. Darity and Mason  summarize the court cases on discrimination, in which employers were found guilty and huge awards were rewarded for plaintiffs. They argue that such cases establish the existence of discrimination. Petersburg Times, , pp.
The six black workers, who were the plaintiffs, gave the taped racist comments of the white corporate officials as evidence Inter Press Service, ; The Chicago Tribune, In , the General Motors Corporation was sued both for gender and racial discrimination the Christian Science Monitor, In , the plaintiffs of the Pitney Bowes, Inc. Neoclassical labor economists explain the existence and persistence of discrimination based on tastes for discrimination and statistical discrimination theories. While overcrowding model moves away from neoclassical theory, the institutional models are non-neoclassical.
The Nobel Prize -winning economist Gary Becker claimed the markets punish the companies that discriminate because it is costly. His argument is as following: .
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The profitability of the company that discriminates is decreased, and the loss is "directly proportional to how much the employer's decision was based on prejudice, rather than on merit. Similarly, the customers who discriminate against certain kinds of workers in favor of less effective have to pay more for their services, in the average. If a company discriminates, it typically loses profitability and market share to the companies that do not discriminate, unless the state limits free competition protecting the discriminators.
However, there is a counter-argument against Becker's claim.
As Becker conceptualized, discrimination is the personal prejudice or a "taste" associated with a specific group, originally formulated to explain employment discrimination based on race. The theory is based on the idea that markets punish the discriminator in the long run as discrimination is costly in the long run for the discriminator. There are three types of discrimination, namely: employer, employee and customer.
In the first one, the employer has a taste for discriminating against women and is willing to pay the higher cost of hiring men instead of women. Thus, the non-pecuniary cost brings an additional cost of discrimination in dollar terms; the full cost of employing women is the wage paid plus this additional cost of discrimination.
For the total cost of men and women to be equal, women are paid less than men. In the second type, the male employees have a distaste for working with women employees. Because of the non-pecuniary cost, they must be paid more than women.
In the third type, the customers or clients have a distaste for being served by woman employees. Therefore, the customers are willing to pay higher prices for a good or a service in order not to be served by women. The as-if non-pecuniary cost is associated with purchasing goods or services from women. Becker's theory states that discrimination cannot exist in the long run because it is costly.
Employment discrimination - Wikipedia
However, discrimination seems to persist in the long run;  it declined only after the Civil Rights Act , as it was seen in the economic history. For instance, men are more likely to work as truck drivers, or the female customers are more likely to choose to be served by women lingerie salespersons because of preferences. However, this segregation cannot explain the wage differentials. In other words, occupational segregation is an outcome of group-typing of employment between different groups but consumer discrimination does not cause wage differentials.
Thus, customer discrimination theory fails to explain the combination of employment segregation and the wage differentials. However, the data points out the jobs associated with women suffer from lower pay. Edmund Phelps  introduced the assumption of uncertainty in hiring decisions.
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Thus, they are more likely to hire the male applicants over the females, if they believe on average men are more productive and more stable. This general view affects the decision of the employer about the individual on the basis of information on the group averages. Blau et al. The non-neoclassical insight that is not part of the statistical discrimination sheds light onto uncertainty. If a woman is given less firm-specific training and is assigned to lower-paid jobs where the cost of her resigning is low based on the general view of women, then this woman is more likely to quit her job, fulfilling the expectations, thus to reinforce group averages held by employers.