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Product Market Structure and Labor Market Discrimination

John S. Heywood, James H. Peoples

Publication Year: 2006

While increased competition may generate economic efficiency and push employee compensation to market rates, it may also help reduce differential treatment for protected groups such as women, minorities, and the disabled. This book presents the most comprehensive body of empirical evidence on the connection between the product market and the extent of discrimination in labor markets. The contributors look at data from the United States, the United Kingdom, Germany, and Hong Kong in order to explore the product market’s influence on discrimination against the disabled, the role of deregulation in creating competition and altering racial employment patterns, and the influence of privatization on public employees’ earnings. Nuanced analyses, using best practice econometrics, lead the contributors to conclude that while competition helps equalize treatment of employees, it does not eliminate discrimination.

Published by: State University of New York Press

Product Market Structure and Labor Market Discrimination

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pp. v-vi


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pp. vii-x

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p. xi-xi

Competition may be an American economic force, even a venerated social icon. But it is always under threat from monopoly power. Perhaps a quarter of U.S. markets have significant market power, and in many major industries, the market power is severe. ...

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pp. xiii-xiv

Most books require the efforts of people not listed on the cover page or table of contents. This volume is no exception. We owe great appreciation to our families for providing us supportive home environments and our colleagues and students at the University of Wisconsin–Milwaukee (UWM) for providing challenging work environments. Specific thanks...

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1. The Influence of Market Structure on Labor Market Discrimination

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pp. 1-14

The motivation for this book comes from many years of involvement in an often acrimonious debate over the influence of increased product market competition on labor market outcomes. This debate is often phrased as whether product competition reduces labor market discrimination. The formal suggestion that it does reduce discrimination nears its fiftieth...

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2. Market Power and Racial Earnings: A Quantile Regression Approach

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pp. 15-38

Neoclassical theories of labor market discrimination suggest that profit in noncompetitive industries gives employers the latitude to engage in discrimination (Becker, 1957). Thus, discrimination is at least partly driven by market structure, and the intense pressure to reduce cost in fiercely competitive industries reduces employers’ latitude to engage in...

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3. Product Market Structure and Gender Discrimination in the United Kingdom

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pp. 39-58

In his classic study of nearly a half century ago, Gary Becker (1957) identified that nonwhite males held a lower proportion of manufacturing jobs in the southern United States in those sectors that were monopolistic than in those that were more nearly competitive. His study began a long line of empirical studies focusing on the association between monopolistic product...

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4. Gender and Wages in Germany: The Impact of Product Market Competition and Collective Bargaining

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pp. 59-80

A substantial literature confirms the existence of a significant gender wage differential, even controlling for productive worker characteristics. Yet, the size of the gender wage differential varies substantially across countries.1 These remarkable differences raise an interesting question, Do differences in institutions and markets influence the extent of discrimination? ...

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5. Gender Composition and Market Structure in Hong Kong

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pp. 81-100

This chapter uses original data to examine the connection between the gender composition of firms’ employees and the market structure in which those firms operate. We were involved in the collection of the data and it has not been previously used for this purpose. We argue that Hong Kong just prior to the establishment of the Special Administrative Region ...

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6. Privatization and Racial Earnings Differentials

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pp. 101-124

A lack of competition can lead to positive racial wage differentials in local public sector labor markets. Such wage differentials may occur despite municipal employers’ strict adherence to equal employment opportunity laws that prohibit earnings and employment discrimination. Racial earnings differentials may arise because black and white ...

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7. New Estimates of Discrimination against Men with Disabilities:The Role of Customer Interaction in the Product Market

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pp. 125-154

In his seminal theory of discrimination, Gary Becker (1957) postulates that discrimination in the labor market can arise from three sources: employers, coworkers, or customers. Whatever the source, the motivation for discrimination is assumed to be individual prejudice against a minority group, manifested by a willingness to incur costs to avoid that group....

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8. Regulatory Reform and Racial Employment Patterns

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pp. 155-186

Economic regulation of transportation and public utilities helped create an environment allowing labor to share industry rents with owners.1 The Wharton research series The Racial Policies of American Industry indicates that prior to the enactment of equal employment opportunity guidelines targeting the transportation sector, blacks were highly ...

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9. Market Structure, Payment Methods,and Racial Earnings Differences

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pp. 187-208

While both earnings differences and payment methods have generated avast amount of literature, the two subjects rarely interact. Moreover, these two subjects have only very rarely been tied to the product market. This chapter argues that the racial earnings difference should be smaller among those receiving output-based pay such as piece rates and ...


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pp. 209-212


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pp. 213-219

E-ISBN-13: 9780791482407
Print-ISBN-13: 9780791466230
Print-ISBN-10: 079146623X

Page Count: 234
Illustrations: 51 tables
Publication Year: 2006