Exam 9: Labor Market Discrimination

Owners of men's clothing stores traditionally discriminate against males when making hiring decisions because they believe that male customers are more eager to buy clothing from female associates. In reality, however, one's sex does not affect one's sales (i.e., one's sex does not affect one's productivity). Discrimination of this sort throughout the labor market has resulted in clothing stores paying male associates lower wages than they pay female associates. A new men's clothing store enters the industry without these prejudicial beliefs. Which of the following outcomes is not likely to come about?

Economic theory suggests that discriminating employers will be driven from the marketplace when the output market is competitive. Why?

If one looks at U.S. Census data and finds that the average male salary is $43,000 while the average female salary is $38,000, which of the following is not likely to be a significant cause of this difference given U.S. labor market demographics?

Consider the following data for men and women: Men Women Average Hourly Wage: \ 12.40 \ 9.90 Average Years of Work Experience: 14.3 9.5 If a regression estimates the return to experience for men, ?_M, to be 0.25, how much of the average difference in wages can be attributed to differences in work experience and how much can be attributed to discrimination and/or unobservable characteristics?

Which of the following causes a difference in wages but does not necessarily qualify as discrimination?

The female-male wage gap in the United States

There is a restaurant that employs only males to serve guests, only females to tend the bar, and a mix of male and female cooks and dishwashers. The dishwashers and cooks never come in contact with the customers. This hiring pattern is most indicative of ________ discrimination.

A firm that discriminates against black labor will certainly

Consider a color-blind firm that is currently maximizing profits. An affirmative action policy is put in place requiring that all firms in the industry abide by a certain quota. Which of the following will occur?

Customer discrimination results in