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Pay Equity Empirical Inquiries (1989) / Chapter Skim
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3. Effects of Excess Supply on the Wage Rates of Young Women
Pages 70-90

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From page 70...
... Bergmann (1974, 1986) argues that excess supply pressures of this sort have been particularly severe in female labor markets ant]
From page 71...
... This occupational segregation by sex presumably limits the potential for a more general diffusion of crowding effects originating from excess supply in female labor markets. Corresponding to these conditions that presumably have resulte(l in crow(ling in female labor markets is the empirical evidence that women have been and continue to be paid less for their market work than men are (see, for instance, Nakamura and Nakamura, 1985; Oi, 1982; and O'Neill, 19854.
From page 72...
... For one thing, some of the conditions that can readily be identified as likely causes of labor market crowding probably affect female labor markets differently from the way they affect male labor markets. For instance, primeaged men who are laid offdue to a downturn in some sector of the economy are likely to remain in the labor force as unemployed workers until they locate new jobs.
From page 73...
... Unemployment rates are sometimes used as indices of general excess labor supply conditions in macroeconometric models. We include state-specific unemployment rate variables for women and men ages 20 to 29 in our log wage equations.
From page 74...
... If there are crowding elects on the wage rates of young women after more general, state-specific labor market conditions have been controlled for by the unemployment and male earnings variables, we expect the coefficient of the log population ratio in our log wage equations to be negative. For similar reasons, increases over time in female employment rates might be expecte~d to lead to excess supply conditions in female labor markets.
From page 75...
... are shown in Appendix B Key Explanatory Variables The explanatory variables of key interest are the state-specific log population ratio and log employment ratio variables, the log of the state average for the earnings of men ages 25 to 45, and individual-specific variables for the number of years of schooling and potential labor market experience (age minus years of schooling minus six)
From page 76...
... sixth rows of the micIdie panel of Table 3-2. With none of the coefficients of the male unemployment rate variable being significantly different from zero, there is no evidence of adverse effects on female wage rates in any of the eight clesignated occupations as a result of men in slack mate labor markets competing for jobs usually or sometimes filled by women.
From page 77...
... (obviously) women with less than 12 in female labor markets, there is less crowd- years of schooling have lower mean edu ing in Oregon than in South Dakota.
From page 78...
... 78 Cal o on Cal U)
From page 80...
... 80 C~ bt bt o .~ 40 U)
From page 81...
... 81 1 C5> CO O X CC io CM X ~ X ~ O oo O CM o o o - o c~ ~ - ~ o o ~ - o ~ .
From page 82...
... 82 CM o of Cal in be ¢ o ._ _ to <~o, U)
From page 84...
... ALTERNATIVE CAUSAL EXPLANATIONS In the empirical literature on female work behavior, log wage equations similar to those estimated in this study are viewe(l as reflecting the wage offers macle to women with specified productive attributes in competitive labor markets in which the wage distributions are determined by marketwide supply and demand conditions not subject to the control of in(liviclual employers or labor force participants. Thus, these equations usually include both individualspecific explanatory variables, such as years of schooling, and certain marketwicle variables, such as the state or county unemployment rate (see, for instance, Heckman, 1981; Nakamura and Nakamura, 1981~.
From page 85...
... Thus, negative coefficient estimates for the log employment ratio variable can still be considered to be indicative of crowding effects in female labor markets, although these crowding effects may be employment rather than wage related. CONCLUSIONS The evidence presented in this study suggests that increases in the female work force, brought about by population increases and increases in female employment rates, 85 have resulted in wage erosion that has been more serious for working women in some demographic and occupational groups than in others.
From page 86...
... Pay equity programs can also be viewed as an institutionalized concession from employers that may serve to insulate the wages of jobholders in some sectors of the female labor market from excess supply pressures. Affirmative action and equal opportunity programs act to break clown barriers regulating female entry into occupations and cushioning the wage rates of those holding jobs in these occupations against excess supply pressures that might otherwise clevelop.
From page 87...
... But we do not agree that consideration of policies to deal with crowding effects in female labor markets must await evidence that this crowding is due to discrimination or that the wage effects of crowding are more severe for female than for mate workers. Perhaps our position on this question can be clarified by pausing for a moment to consider some of the issues in the health care area that have come to be viewed as appropriate 87 topics for public policy debate and potential government action.
From page 88...
... Pp. 91139 in Sherwin Rosen, ea., Studies in Labor Markets.
From page 89...
... Data from the 1980 Census Ratio for Women 20-24 Versus Women 25-29 Unemployment Rate Mean Annual Employment Women Men Earnings for State Population Rate 2()
From page 90...
... The natural logarithm of this variable was included in the log wage equations to account for demand effects.


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