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Gender Gaps in Education and Labor Market Outcomes in the United States: The Impact of Employers` Prejudice

Author

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  • Flabbi, Luca
  • Tejada, Mauricio

Abstract

This paper makes three contributions to the existing literature. First, it provides descriptive evidence on gender differentials by education level in the US labor market over the last twenty years. Second, it uses the structural estimation of a search model of the labor market to identify and quantify the impact of employers' prejudice on labor market gender differentials. Third, it connects both the descriptive and the analytical findings to recent policy interventions in the US labor market and presents some policy experiments. The results show that prejudice may still have a role in explaining the evidence on gender differentials and there is at least one scenario where the possibility of the presence of prejudiced employers in the labor market has substantial effects. In particular, it is responsible for the reversal of the returns to schooling ranking in recent years and it may explain up to 44% of the gender wage gap of the top education group (Master and PhD) in 2005. Since prejudice is still important, policy interventions may be effective in attaining both efficiency and welfare gains. The paper is in favor of implementing an affirmative action policy because it is frequently able to close the gender gap without reducing overall welfare and because it is effective in targeting the group that should take center stage in the future debate about gender differentials: high-skilled, high-earners workers, who also have family responsibilities.

Suggested Citation

  • Flabbi, Luca & Tejada, Mauricio, 2012. "Gender Gaps in Education and Labor Market Outcomes in the United States: The Impact of Employers` Prejudice," IDB Publications (Working Papers) 4205, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:4205
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    Cited by:

    1. Juan Sebastian Munoz, 2014. "Re-estimating the Gender Gap in Colombian Academic Performance," Research Department Publications IDB-WP-469, Inter-American Development Bank, Research Department.
    2. Martín A Rossi & Christian A Ruzzier, 2018. "Career Choices and the Evolution of the College Gender Gap," The World Bank Economic Review, World Bank, vol. 32(2), pages 307-333.
    3. Selin Dilli & Gerarda Westerhuis, 2018. "How institutions and gender differences in education shape entrepreneurial activity: a cross-national perspective," Small Business Economics, Springer, vol. 51(2), pages 371-392, August.
    4. Eline Schoonjans & Hanna Hottenrott & Achim Buchwald, 2024. "Welcome on Board? Appointment Dynamics of Women as Directors," Journal of Business Ethics, Springer, vol. 192(3), pages 561-589, July.
    5. Juan Sebastian Munoz, 2014. "Re-estimating the Gender Gap in Colombian Academic Performance," Research Department Publications IDB-WP-469, Inter-American Development Bank, Research Department.

    More about this item

    Keywords

    Gender differentials; discrimination; search models; maximum likelihood estimation; structural estimation; affirmative action;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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