[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/jku/nrnwps/2009_26.html
   My bibliography  Save this paper

Competition and Gender Prejudice: Are Discriminatory Employers Doomed to Fail?

Author

Listed:
  • Andrea Weber
  • Christine Zulehner
Abstract
According to Becker's (1957) famous theory on discrimination, entrepreneurs with a strong prejudice against female workers forgo profits by submitting to their tastes. In a com- petitive market their firms lack efficiency and are therefore forced to leave. We present new empirical evidence for this prediction by studying the survival of startup firms in a large longitudinal matched employer-employee data set from Austria. Our results show that firms with strong preferences for discrimination, i.e. a low share of female employees relatively to the industry average, have significantly shorter survival rates. This is espe- cially relevant for firms starting out with female shares in the lower tail of the distribution. They exit about 18 months earlier than firms with a median share of females. We see no differences in survival between firms at the top of the female share distribution and at the median, though. We further document that highly discriminatory firms that manage to survive submit to market powers and increase their female workforce over time.

Suggested Citation

  • Andrea Weber & Christine Zulehner, 2009. "Competition and Gender Prejudice: Are Discriminatory Employers Doomed to Fail?," NRN working papers 2009-26, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:nrnwps:2009_26
    as

    Download full text from publisher

    File URL: http://www.labornrn.at/wp/wp0926.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sandra E. Black & Elizabeth Brainerd, 2004. "Importing Equality? The Impact of Globalization on Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 57(4), pages 540-559, July.
    2. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 917-962.
    3. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
    4. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
    5. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2009. "Social Connections and Incentives in the Workplace: Evidence From Personnel Data," Econometrica, Econometric Society, vol. 77(4), pages 1047-1094, July.
    6. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818728, September.
    7. Kevin Lang & Michael Manove & William T. Dickens, 2005. "Racial Discrimination in Labor Markets with Posted Wage Offers," American Economic Review, American Economic Association, vol. 95(4), pages 1327-1340, September.
    8. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    9. Tor Jakob Klette & Samuel Kortum, 2004. "Innovating Firms and Aggregate Innovation," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 986-1018, October.
    10. Marcus Asplund & Volker Nocke, 2003. "Firm Turnover in Imperfectly Competitive Markets," PIER Working Paper Archive 03-010, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    11. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524131, September.
    12. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    13. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2010. "Social Incentives in the Workplace," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(2), pages 417-458.
    14. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    15. Lucia Foster & John Haltiwanger & Chad Syverson, 2016. "The Slow Growth of New Plants: Learning about Demand?," Economica, London School of Economics and Political Science, vol. 83(329), pages 91-129, January.
    16. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
    17. Sandra E. Black & Philip E. Strahan, 2001. "The Division of Spoils: Rent-Sharing and Discrimination in a Regulated Industry," American Economic Review, American Economic Association, vol. 91(4), pages 814-831, September.
    18. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
    19. Asa Rosen, 2003. "Search, Bargaining, and Employer Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 807-830, October.
    20. Lise Vesterlund & Muriel Niederle, 2004. "Do Women shy away from Competition?," Econometric Society 2004 North American Summer Meetings 652, Econometric Society.
    21. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818742, September.
    22. Zweimuller, J & Winter-Ebmer, R, 1994. "Gender Wage Differentials in Private and Public Sector Jobs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(3), pages 271-285, July.
    23. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805, Elsevier.
    24. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524117, September.
    25. Richard Blundell & James L. Powell, 2001. "Endogeneity in nonparametric and semiparametric regression models," CeMMAP working papers 09/01, Institute for Fiscal Studies.
    26. Kawaguchi, Daiji, 2007. "A market test for sex discrimination: Evidence from Japanese firm-level panel data," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 441-460, June.
    27. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
    28. Leonard, Jonathan S, 1989. "Women and Affirmative Action," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 61-75, Winter.
    29. Benedetto, Gary & Haltiwanger, John & Lane, Julia & McKinney, Kevin, 2007. "Using Worker Flows to Measure Firm Dynamics," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 299-313, July.
    30. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521818735, September.
    31. Dewatripont,Mathias & Hansen,Lars Peter & Turnovsky,Stephen J. (ed.), 2003. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521524124, September.
    32. Orley Ashenfelter & Timothy Hannan, 1986. "Sex Discrimination and Product Market Competition: The Case of the Banking Industry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 149-173.
    33. P. Geroski, 1998. "An Applied Econometrician's View of Large Company Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 271-294, June.
    34. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:rwirep:0146 is not listed on IDEAS
    2. Andrea Weber & Christine Zulehner, 2009. "Competition and Gender Prejudice: Are Discriminatory Employers Doomed to Fail?," Ruhr Economic Papers 0146, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 20-32, February.
    4. Ederington, Josh & Sandford, Jeremy, 2016. "Employer discrimination and market structure: Does more concentration mean more discrimination?," International Journal of Industrial Organization, Elsevier, vol. 48(C), pages 1-33.
    5. Luke Taylor & Taisuke Otsu, 2019. "Estimation of nonseparable models with censored dependent variables and endogenous regressors," Econometric Reviews, Taylor & Francis Journals, vol. 38(1), pages 4-24, January.
    6. Aassve, Arnstein & Arpino, Bruno, 2008. "Estimation of causal effects of fertility on economic wellbeing: evidence from rural Vietnam," ISER Working Paper Series 2007-27, Institute for Social and Economic Research.
    7. Peter C.B. Phillips & Liangjun Su, 2009. "Nonparametric Structural Estimation via Continuous Location Shifts in an Endogenous Regressor," Cowles Foundation Discussion Papers 1702, Cowles Foundation for Research in Economics, Yale University.
    8. Clémence Berson, 2016. "Local labor markets and taste-based discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
    9. Brambilla, Irene, 2009. "Multinationals, technology, and the introduction of varieties of goods," Journal of International Economics, Elsevier, vol. 79(1), pages 89-101, September.
    10. Richard Blundell & Martin Browning & Ian Crawford, 2008. "Best Nonparametric Bounds on Demand Responses," Econometrica, Econometric Society, vol. 76(6), pages 1227-1262, November.
    11. Gabriel Burdín, 2014. "Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay," ILR Review, Cornell University, ILR School, vol. 67(1), pages 202-238, January.
    12. Lorenz Goette & David Huffman & Stephan Meier & Matthias Sutter, 2010. "Group Membership, Competition, and Altruistic versus Antisocial Punishment: Evidence from Randomly Assigned Army Groups," Working Papers 2010-24, Faculty of Economics and Statistics, Universität Innsbruck.
    13. Emilia Del Bono & Andrea Weber, 2008. "Do Wages Compensate for Anticipated Working Time Restrictions? Evidence from Seasonal Employment in Austria," Journal of Labor Economics, University of Chicago Press, vol. 26(1), pages 181-221.
    14. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2003. "Evaluating the impact of education on earnings in the UK: Models, methods and results from the NCDS," IFS Working Papers W03/20, Institute for Fiscal Studies.
    15. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    16. Florens, Jean-Pierre & Simoni, Anna, 2012. "Nonparametric estimation of an instrumental regression: A quasi-Bayesian approach based on regularized posterior," Journal of Econometrics, Elsevier, vol. 170(2), pages 458-475.
    17. Stefan Hoderlein & Yuya Sasaki, 2011. "On the role of time in nonseparable panel data models," CeMMAP working papers CWP15/11, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    18. Andrew Chesher, 2004. "Identification of sensitivity to variation in endogenous variables," CeMMAP working papers 10/04, Institute for Fiscal Studies.
    19. Jeffrey A. Flory & Andreas Leibbrandt & John A. List, 2010. "Do Competitive Work Places Deter Female Workers? A Large-Scale Natural Field Experiment on Gender Differences in Job-Entry Decisions," NBER Working Papers 16546, National Bureau of Economic Research, Inc.
    20. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    21. Bryan S. Graham & James Powell, 2008. "Identification and Estimation of 'Irregular' Correlated Random Coefficient Models," NBER Working Papers 14469, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Firm survival; profitability; female employment; discrimination; market test; matched employer-employee data;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jku:nrnwps:2009_26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: René Böheim (email available below). General contact details of provider: https://edirc.repec.org/data/aclawat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.