TY  - RPRT
        AU  - Flabbi, Luca
        TI  - Gender Discrimination Estimation in a Search Model with Matching and Bargaining
        PY  - 2005/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1764
        UR  - https://www.iza.org/publications/dp1764
        AB  - Gender wage differentials, conditional on observed productivity characteristics, have been
considered a possible indication of prejudice against women in the labor market. However,
there is no conclusive evidence on whether these differentials are due to labor market
discrimination or to unobserved productivity differences. The objective of this paper is to
propose a solution for this identification problem by developing and estimating a search
model of the labor market with matching, bargaining and employers' taste discrimination. In
equilibrium all types of employers wage discriminate women: prejudiced employers because
of preference and unprejudiced employers because of spillover effects that worsen the
bargaining position of women. Estimation is performed by maximum likelihood on Current
Population Survey data for the year 1995. Results indicate that the productivity of women is
6.5% lower than the productivity of men and that about half of the employers are prejudiced
against women. Three policy experiments are implemented using the estimated parameters:
an equal pay policy, an affirmative action policy and a wage differential decomposition that
takes into account equilibrium effects.
        KW  - maximum likelihood
KW  - search models
KW  - discrimination
KW  - gender differentials
KW  - estimation
KW  - structural estimation
KW  - affirmative action
        ER  -