German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination
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German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination
Dawson, Peter | Hinks, Timothy | Watson, Duncan
Vierteljahrshefte zur Wirtschaftsforschung, Vol. 70 (2001), Iss. 1 : pp. 107–114
4 Citations (CrossRef)
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1Department of Economics and International Development, University of Bath, Bath BA2 7AY, United Kingdom.
2Middlesex University Business School, The Burroughs, Hendon, London NW4 4BT, United Kingdom.
3Middlesex University Business School, The Burroughs, Hendon, London NW4 4BT, United Kingdom.
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Abstract
Using stochastic panel wage frontiers, this paper estimates the relative underpayment of females and males in the reunified Germany. The estimates are initially applied to discrimination analysis. It finds that females have higher underpayment and that the male-female differential increased over the period 1991–1993. However, the paper suggests that the estimates of underpayment reflect other concerns, such as dynamic monopsony. Labor market inefficiency must be taken into account before discrimination analysis is possible.