From: Review of Development and Change
Problem
of discrimination has been a favourite topic of engagement in various
disciplines as variety of discriminatory practices have been in vogue across space
and time. Socially derogatory treatment of humans based on inherited and
endowed characteristics has been a vice which the world has lived with for too
long. Yet, such practices are remarkably persistent and sometimes social
mechanisms are created and often justified to perpetuate them.
Discrimination in wage on the basis of gender has been studied by Niederle and Vesterlund (2007), Addison et al. (2014), Arrow (1973), Rees and Shultz (1970), Andersen et al. (2013) and Flory et al. (2015). The studies by Flory et al. (2015), Andersen et al. (2013) and Niederle and Vesterlund (2007) suggest that gender imbalance in labour market arises as men appear to be more competitively inclined than women. Such a scenario might be the result of social prejudice and family environment. The empirical study by Addison et al. (2014) considers the role of gender in promotion and promotion-related earnings over the course of a career. Their findings show that the strong returns to education in later career arising from the growth in promotion-related earnings solely accrue to males, thereby resulting in gender discrimination.
One
can easily infer that even if a single firm is bent on discriminating, it can
still survive competition from non-discriminating firms provided it is more
efficient than the others. Firms have different levels of productivities with
better firms earning more from same level of investment simply because they
enjoy a firm-specific advantage. Capital would not desert such firms, as they
can still give them higher returns. Thus, more productive firms can get away by
discriminating. Kenneth Arrow focused on the idea of statistical discrimination
whereby firms would look at past data to form their current behaviour. If there
is already some discrimination which reflects female workers are hired in
smaller numbers or are offered lower wages, new entrants to the industry might
accept it as a signal of profit maximising behaviour and perpetuate such
actions. They would try to imitate more productive firms. Thus, if greater
efficiency and discrimination coexist, it rationalises discrimination.
Discriminatory practices can be deeply ingrained in societies and institutions, and they can be perpetuated through social norms, stereotypes, and prejudices. In some cases as I know from these types of whatsapp plus groups, discriminatory practices are explicitly sanctioned by laws or policies, while in other cases, they may be more subtle and implicit.
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ReplyDelete. If there is already some discrimination which reflects female workers are hired in smaller numbers or are offered lower wages, new entrants to the industry might accept it as a signal of profit maximising behaviour and perpetuate such actions. They would try to imitate more productive firms. Thus, if greater efficiency and discrimination coexist, it rationalises discrimination.
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