Journal of Population Economics

, Volume 30, Issue 1, pp 307–337

The heterogeneity of ethnic employment gaps

  • Romain Aeberhardt
  • Élise Coudin
  • Roland Rathelot
Original Paper

Abstract

This paper investigates the heterogeneity of ethnic employment gaps using a new single-index based approach. Instead of stratifying our sample by age or education, we study ethnic employment gaps along a continuous measure of employability, the employment probability minority workers would have if their characteristics were priced as in the majority group. We apply this method to French males, comparing those whose parents are North African immigrants and those with native parents. We find that both the raw and the unexplained ethnic employment differentials are larger for low-employability workers than for high-employability ones. We show in a theoretical framework that this heterogeneity can be accounted for by homogeneous underlying mechanisms and is not evidence for, say, heterogeneous discrimination. Finally, we discuss our main empirical findings in the light of simple taste-based vs. statistical discrimination models.

Keywords

Discrimination Employment differentials Decomposition 

References

  1. Abowd JM, Killingsworth M (1984) Do minority/white unemployment differences really exist?. J Bus Econ Stat 2:64–72Google Scholar
  2. Adida CL, Laitin DD, Valfort M. -A. (2014) Muslims in France: identifying a discriminatory equilibrium. J Popul Econ 27:1039–1086CrossRefGoogle Scholar
  3. Aeberhardt R, Fougère D, Pouget J, Rathelot R (2010) Wages and employment of french workers with african origin. J Popul Econ 23(3):881–905CrossRefGoogle Scholar
  4. Aeberhardt R, Rathelot R (2013) Les différences liées à l’origine nationale sur le marché du travail français. Revue Française d’Economie 28(1):43–71CrossRefGoogle Scholar
  5. Aigner DJ, Cain GG (1977) Statistical theories of discrimination in labor markets. Ind Labor Relat Rev 30(2):175–187CrossRefGoogle Scholar
  6. Algan Y, Dustmann C, Glitz A, Manning A (2010) The economic situation of first and second-generation immigrants in France, Germany and the United Kingdom. Econ J 120(542):F4–F30CrossRefGoogle Scholar
  7. Altonji J, Blank R (1999) Race and gender in the labor market. In: Ashenfelter O, Card D (eds) Handbook of labor economics, vol 3C. Elsevier, Amsterdam, pp 3143–3259Google Scholar
  8. Arcidiacono P, Bayer P, Hizmo A (2010) Beyond signaling and human capital: education and the revelation of ability. American Economic Journal: Applied Economics 2(4):76–104Google Scholar
  9. Athey S, Imbens G (2015) Machine learning for estimating heterogeneous casual effects. Stanford Graduate School of Business Working Paper No 3350Google Scholar
  10. Bjerk D (2007) The differing nature of black-white wage inequality across occupational sectors. J Hum Resour 42(2)Google Scholar
  11. Black D, Haviland A, Sanders S, Taylor L (2006) Why do minority men earn less? A study of wage differentials among the highly educated. Rev Econ Stat 88 (1):300–313CrossRefGoogle Scholar
  12. Black DA, Haviland AM, Sanders SG, Taylor LJ (2008) Gender wage disparities among the highly educated. J Hum Resour 43(3):630–659Google Scholar
  13. Black SE, Devereux PJ, Salvanes KG (2009) Like father, like son? A note on the intergenerational transmission of IQ scores. Econ Lett 105(1):138–140CrossRefGoogle Scholar
  14. Blinder A (1973) Wage discrimination: reduced form and structural estimates. J Hum Resour 8(4):436–455CrossRefGoogle Scholar
  15. Bound J, Freeman RB (1992) What went wrong? The erosion of relative earnings and employment among young black men in the 1980s. Q J Econ 107(1):201–32CrossRefGoogle Scholar
  16. Cain GG, Finnie RE (1990) The black-white difference in youth employment: evidence for demand-side factors. J Labor Econ 8(1):S364–95CrossRefGoogle Scholar
  17. Chandra A (2000) Labor-market dropouts and the racial wage gap: 1940–1990. Am Econ Rev Pap Proc 90(2):333–338CrossRefGoogle Scholar
  18. Charles KK, Guryan J (2011) Studying discrimination: fundamental challenges and recent progress. Annual Review of Economics 3:479–511CrossRefGoogle Scholar
  19. Combes P-P, Decreuse B, Laouénan M, Trannoy A (2014) Customer discrimination and employment outcomes: theory and evidence from the french labor market, forthcoming in Journal of Labor EconomicsGoogle Scholar
  20. Couch KA, Fairlie R (2010) Last hired, first fired? Black-white unemployment and the business cycle. Demography 47(1):227–247CrossRefGoogle Scholar
  21. Darity WAJ, Mason PL (1998) Evidence on discrimination in employment: codes of color, codes of gender. J Econ Perspect 12(2):63–90CrossRefGoogle Scholar
  22. Dehejia RH (2005) Program evaluation as a decision problem. J Econ 125 (1-2):141–173CrossRefGoogle Scholar
  23. Edo A, Jacquemet N, Yannelis C (2014) Language skills and homophilous hiring discrimination: evidence from gender- and racially-differentiated applications, CES working paper 2013/58, University Paris IGoogle Scholar
  24. Fairlie RW, Sundstrom W (1999) The emergence, persistence and recent widening of the racial unemployment gap. Ind Labor Relat Rev 52:252–270CrossRefGoogle Scholar
  25. Fernandez R, Fogli A (2009) Culture: an empirical investigation of beliefs, work, and fertility. Am Econ J Macroecon 1(1):146–177CrossRefGoogle Scholar
  26. Flanagan RJ (1976) On the stability of the racial unemployment differential. Am Econ Rev 66(2):302–08Google Scholar
  27. Fortin N, Lemieux T, Firpo S (2011) Decomposition methods in economics. In: Ashenfelter O, Card D (eds) Handbook of labor economics, chap 1, vol 4. Elsevier, Amsterdam, pp 1–102Google Scholar
  28. Gobillon L, Meurs D, Roux S (2015) Have women really a better access to best-paid jobs in the public sector? Counterfactuals based on a job assignment model, mimeoGoogle Scholar
  29. Heywood JS, Parent D (2012) Performance pay and the white-black wage gap. J Labor Econ 30(2):249–290CrossRefGoogle Scholar
  30. Hirano K, Porter J (2005) Asymptotics for statistical decision rules. Working paper, Dept of Economics, University of WisconsinGoogle Scholar
  31. Imbens GW, Wooldridge JM (2009) Recent developments in the econometrics of program evaluation. J Econ Lit 47(1):5–86CrossRefGoogle Scholar
  32. Johnson WR, Neal D (1998) Basic skills and the black-white earnings gap. In: Johnson WR, Neal D (eds) The black-white test score gap. Brooking Institution, pp 480–500Google Scholar
  33. Lang K, Lehmann J-YK (2011) Racial discrimination in the labor market: theory and empirics. Journal of Economic Literature, p forthcomingGoogle Scholar
  34. Lang K, Manove M (2011) Education and labor market discrimination. Am Econ Rev 101(4):1467–96CrossRefGoogle Scholar
  35. Manski CF (2000) Identification problems and decisions under ambiguity: empirical analysis of treatment response and normative analysis of treatment choice. J Econ 95(2):415–442CrossRefGoogle Scholar
  36. Manski CF (2002) Treatment choice under ambiguity induced by inferential problems. Journal of Statistical Planning and Inference 105(1):67–82. Imprecise Probability Models and their ApplicationsCrossRefGoogle Scholar
  37. Manski CF (2004) Statistical treatment rules for heterogeneous populations. Econometrica 72(4):1221–1246CrossRefGoogle Scholar
  38. Nachman DC (1975) Risk aversion, impatience, and optimal timing decisions. J Econ Theory 11(2):196–246CrossRefGoogle Scholar
  39. Neal DA, Johnson WR (1996) The role of premarket factors in black-white wage differences. J Polit Econ 104(5):869–95CrossRefGoogle Scholar
  40. Oaxaca R (1973) Male-female wage differentials in urban labor markets. Int Econ Rev 14(3):693–709CrossRefGoogle Scholar
  41. Pissarides CA (1974) Risk, job search, and income distribution. J Polit Econ:1255–1267Google Scholar
  42. Pratt JW (1964) Risk aversion in the small and in the large. Econometrica:122–136Google Scholar
  43. Rathelot R (2014) Ethnic differentials on the labor market in the presence of asymmetric spatial sorting: set identification and estimation. Reg Sci Urban Econ 48(C):154–167CrossRefGoogle Scholar
  44. Ritter JA, Taylor LJ (2011) Racial disparity in unemployment. Rev Econ Stat 93:30–42CrossRefGoogle Scholar
  45. Rosenbaum PR, Rubin DB (1983) The central role of the propensity score in observational studies for causal effects. Biometrika 70:41–55CrossRefGoogle Scholar
  46. Rubin D (1974) Estimating causal effects of treatments in randomized and non-randomized studies. J Educ Psychol 66:688–701CrossRefGoogle Scholar
  47. Stratton LS (1993) Racial differences in men’s unemployment. Ind Labor Relat Rev 46(3):451–463CrossRefGoogle Scholar
  48. Tô M (2014) Access and returns to education and the ethnic earning gap in France, mimeoGoogle Scholar
  49. Welch F (1990) The employment of black men. J Labor Econ 8(1):S26–74CrossRefGoogle Scholar
  50. Xie Y, Brand JE, Jann B (2012) Estimating heterogeneous treatment effects with observational data. Sociol Methodol 42(1):314–347CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  • Romain Aeberhardt
    • 1
  • Élise Coudin
    • 1
  • Roland Rathelot
    • 2
  1. 1.CRESTParisFrance
  2. 2.University of WarwickCoventryUK

Personalised recommendations