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Title: Essays on Racial Discrimination and Turnover in the Labor Market
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1. Mondal, Shamim Shahnowaz
Essays on Racial Discrimination and Turnover in the Labor Market
Ph.D. Dissertation, Department of Economics, University of Rochester, October 2007.
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Demography; Discrimination, Employer; Discrimination, Racial/Ethnic; Labor Market Outcomes; Racial Differences; Wage Differentials

Permission to reprint the abstract has not been received from the publisher.

Workers, differentiated by easily observable characteristics like race and gender, experience different outcomes in the labor market. As has been well known to social scientists, significant differences in earnings exist among people who are otherwise similar (according to readily available measures of productivity) but differ across observable characteristics that are seemingly uncorrelated with productive ability of an individual. This has led to the question of whether certain demographic groups are treated unfairly compared to others. In this dissertation, I study the differences between the two major demographic groups in the US, viz., blacks and whites.

In Chapter 2, I develop a dynamic (search-matching-bargaining) model of employer discrimination with on-the-job search by workers. Workers are either black or white, and employers differ by whether they discriminate against black workers or not. I analyze the impact of taste-based employer discrimination on wages and job-to-job turnover for both races. I use data from National Longitudinal Survey of Youth 79 (NLSY79) to find model parameters that matches some carefully chosen moments from the data. Two variables of particular interest are the extent of disutility suffered by prejudiced employers from employing minority workers, and the proportion of such employers in the market. I find that the extent of discrimination is significantly lower than what has been found elsewhere, although they vary slightly across specifications used. Discrimination accounts for between 6% to 8% of differences in mean wages vi between races, depending on the controls used. Also, differences in exogenous job-termination rates play an important role in generating wage differentials. In Chapter 3, the assumption of an exogenous job-separation rate to unemployment is relaxed. In each period, workers experience productivity shocks that changes the match quality in the current, match. Consequently, some matches are rendered unpr ofitable, and hence the worker chooses to be unemployed. While discrimination is still a minor contributor to wage differences, it's impact is more profound on job-to-unemployment transition rates, whereas productivity differences are a much bigger contributor to wage differences as well as significant contributor to job-to-unemployment movements. The magnitude of the productivity shocks needed to generate differences observed in the data are not much different between blacks and whites.

Bibliography Citation
Mondal, Shamim Shahnowaz. Essays on Racial Discrimination and Turnover in the Labor Market. Ph.D. Dissertation, Department of Economics, University of Rochester, October 2007..