Labor Economics Series LABOR MARKET DISCRIMINATION Tokoh Pejuang Wanita Indonesia Raden Adjeng Kartini 21 April 1879 – 17 September 1904 2 Pemikiran Raden Adjeng Kartini Adanya keinginan untuk memperbaiki kondisi kaum wanita yang disebabkan kungkungan adat, antara lain : • Dunia wanita hanya sebatas tembok rumah. • Tidak bebas mendapatkan akses pendidikan. • Dipingit dan dinikahkan dengan pria yang tidak dikenal. 3 Fakta di Indonesia 4 a an an ni ta i ks du ny in La o Pr r Pe sa Ja l ua nj Pe a n l na io Pria Wanita TU TU TU ah Us na pi s fe ro im P ga m pe ta Ta Ke Wanita na Te 5 0 Pria Penduduk yang Bekerja (2007) 30.000.000 20.000.000 10.000.000 Penduduk yang Bekerja (2007) JENIS KELAMIN Jenis Pekerjaan Utama Jumlah Pria Tenaga Profesional 1.945.782 1.857.339 3.803.121 310.089 57.295 367.384 Tata Usaha 2.608.947 1.383.556 3.992.503 TU Penjualan 8.590.673 8.046.116 16.636.789 TU Jasa 3.351.697 2.992.762 6.344.459 TU Pertanian 26.479.175 15.753.497 42.232.672 Produksi 18.446.465 5.325.368 23.771.833 418.454 15.926 434.380 62.151.282 35.431.859 97.583.141 Kepemimpinan Lainnya Jumlah 6 Wanita sa Ja n ua Ke n ga n n ga an ng an ut gk An a ag rd Pe a un ng Ba tri rik st Li s du In n ba ian m rta Pe n rta Pe 7 Pria Wanita 0 Pria Wanita Rata-rata Upah (2006) 1.600.000 1.200.000 800.000 400.000 Rata-rata Upah (2006) SEKTOR LAPANGAN PEKERJAAN 1 Pertanian, Kehutanan, Perburuan, Perikanan (Agriculture,Forestry,Hunting,Fishery) 2 Pertambangan, Penggalian (Mining and Quarrying) 3 Industri Pengolahan (Manufacturing Industries) 4 Listrik, gas dan air (Electricity, Gaz and Water) 5 WANITA 438.149 234.586 1.541.241 771.415 826.257 583.768 1.176.160 1.338.737 Bangunan (Construction) 734.070 1.073.573 6 Perdagangan Besar, Rumah Makan & Hotel (Wholesale Trade,Restaurant & Hotel) 806.110 621.248 7 Angkutan, Pergudangan dan Komunikasi (Transportation,Storage & Communication) 934.761 944.419 8 Keuangan, Asuransi,Jasa Perusahaan (Financing,Insurance,Business Services) 1.422.252 1.461.926 9 Jasa Kemasyarakatan (Public Services) 1.126.559 789.557 827.101 612.131 Rata-rata 8 PRIA Penduduk yang Bekerja Berdasarkan Jam Kerja Tahun 2007 45.000.000 30.000.000 15.000.000 0 Wanita Pria 9 Pria Wanita <1 jam 1-35 jam >35 jam 803.388 14.623.275 20.005.196 1.798.703 15.615.701 44.736.878 Konsep Diskriminasi 10 Konsep Diskriminasi George Borjas : Differences in EARNINGS and EMPLOYMENT OPPORTUNITIES among equally skilled workers employed in the same job simply because of the worker’s race, gender, national origin, sexual orientation, or other seemingly irrelevant characteristics. 11 Konsep Diskriminasi Discrimination means treating people differently and less favourably because of characteristics that are not related to their merit or the requirements of the job. These include race, colour, sex, religion, political opinion, national extraction and social origin. 12 The Discrimination Coefficient 13 The Discrimination Coefficient Lauched for the first time by Gary S. Becker The Economics of Discrimination (1957) 14 The Discrimination Coefficient • Basic Concept : Taste Discrimination • Assumption Two types of workers : • White workers : wage wW • Black workers : wage wB 15 The Discrimination Coefficient • If the employer is prejudiced againts black, employer gets disutility from hiring black workers. • Disutility : employer will act as if costs for black worker wB (1 + d), where d is positive number and is called : The Discrimination Coefficient 16 The Discrimination Coefficient • Suppose that wB = $10, and that d =0,5 ; the employer will then act as if hiring a black worker costs $ 15 • The greater the prejudiced, the greater is the disutility from hiring black workers, and the greater is the discrimination coefficient d. 17 The Discrimination Coefficient • If these black employers prefer to hire black workers, they will act as if hiring a black worker is cheaper than it actually is. Nepotism Coefficient wB (1 – n ) 18 Labor Market Discrimination Analysis FIRM Non Discriminatory Firm W = VMP 19 Discriminatory Firm White Firm againts Black Black Firm againts Black Discrimination Coefficient is very High Discrimination Coefficient is relatively Low Employer Discrimination 20 Skill and Labor Market Outcomes (2001) WHITE HISPANIC Male Female Male Female Male Female Highschool Graduate or more (Percent) 84.3 85.2 78.5 78.9 56.1 57.9 Bachelor’s degree or more (Percent) 29.1 25.4 16.4 17.5 11.0 11.2 Labor Force Participation Rate (Percent) 79.9 59.9 72.1 65.2 83.8 59.3 Unemployment Rate (Percent) 4.7 3.6 8.0 7.0 5.2 6.6 49.8 29.6 33.5 26.0 30.8 22.3 55.4 37.1 38.5 30.8 34.3 28.0 Annual Earnings (in $1,000) Annual Earnings (Full Time) 21 BLACK Fact : White Wage > Black Wage 22 Employer Discrimination • Assumption : White Workers and Black Workers are Perfect Subtitutes in Production. • Firms’s output depends on the total number of workers hired, regardless of their race have the same Marginal Product of Labor ( MPE ) 23 Employer Discrimination Production function: q = f ( EW + EB ) q firm’s output EW number of white workers hired EB 24 number of black workers hired Employment in a non Discriminatory Firm 25 Employment in a non Discriminatory Firm • Both groups of workers have the same Value of Marginal Product, a non discriminatory firms will hire whichever group is Cheaper • Suppose that wW > wB , a firms that doesn’t discriminate will hire black workers up to the point where wB = VMPE E 26 * B The Employment Decision of a Firm That Does Not Discriminate Dollar VMPE Black workers wage is less than wB = VMPE white wage How many worker will be hired..?? wB E B* 27 ? Employment Employment in a Discriminatory Firm 28 Employment in a Discriminatory Firm • The employer act as if black wage is not wB , but instead equal to wB (1 + d). Where d is discrimination coefficient. • The employer’s hiring decision based on a comparison wW and wB (1 + d) – Hire only blacks if wB (1 + d) < wW – Hire only white if wB (1 + d) > wW 29 Employment in a Discriminatory Firm • As long as black and white workers are perfect subtitutes, firms have a segregated workforce. • Employer’s who have little prejudice and hence have small discrimination coefficient, will hire only BLACKS (called “Black Firm”). • Employer’s who are very prejudice and have very large discrimination coefficient, will hire only WHITES (called “White Firm”). 30 Employment in a Discriminatory Firm WHITE FIRM • The white firm hires workers up to the point where : wW = VMPE • Assumption : wW > WB • The white firm is paying an excessively high price for its workers and hires relatively few workers ( EW* ) 31 The Employment Decision of a Prejudiced Firm Dollar wW White Firm VMPE EW* 32 Employment Employment in a Discriminatory Firm BLACK FIRM • Non discriminatory firms : * wB = VMPE E B • If discrimination coefficient d0 : – Price of Black Labor wB ( 1 + d0 ) – Amount of Labor hired : wB ( 1 + d0 ) = VMPE 33 Employment in a Discriminatory Firm BLACK FIRM The number of black workers hired, therefore, is smaller for firms that have larger discrimination coefficient. 34 The Employment Decision of a Prejudiced Firm Dollar Discrimination Coefficient wB 1 d1 Black Firm wB 1 d 0 wB VMPE E B1 35 E 0 B E * B Employment Discrimination and Profits 36 Discrimination and Profits Firms that discriminate lose on two counts : • The prejudiced employer could have hired the same number of black worker at lower wage. Because black and white workers are perfect subtitutes. • Discriminatory black firms are hiring too few 0 1 E workers ( B or E B ) they are giving up profits in order to minimize contact with black workers. 37 Profit and Discrimination Coefficient Dollar max Max Profit w Black Firm 0 38 White Firm dw Discrimination Coefficient Discrimination and Profits The Most Profitable Firm Zero Discrimination 39 Labor Marker Equilibrium 40 Discrimination and Profits • Firm dengan Discrimination Coefficient : – Rendah cenderung Black Firm – Tinggi cenderung White Firm • Asumsi : Supply Black Worker Perfectly Inelastic sejumlah N Black person tidak terpengaruh tingkat upah. 41 Labor Market Equilibrium Black-White Wage Ratio S ( wB / wW )' D’ 1 R ( wB / wW ) * D 0 42 N Black Employment Employee Discrimination 43 Employee Discrimination • Diskriminasi dilakukan oleh “Fellow Worker” • Misal : White worker yang bekerja pada Black Firm dengan upah wW akan merasa mendapat upah wW (1- d). • Tidak berpengaruh terhadap “Profitability of Firms” karena white worker dan black worker adalah perfect subtitutes sehingga firm membayar jumlah upah yang sama. 44 Customer Discrimination 45 Customer Discrimination • Dikemukakan oleh Harry J. Holzer dan Keith R. Ihlanfeldt (1998) research di Atlanta, Boston, Detroit dan Los Angeles. • Keputusan membeli tidak ditentukan oleh Actual Price ( p ) tapi oleh The UtilityAdjusted Price p (1 + d). • Employer dapat mengatur tenaga penjualan sesuai kondisi. 46 Customer Discrimination TYPE FIRM > 75 % WHITE CUSTOMER PERBEDAAN Customer & worker bertemu 58,0 % 9,0 % 49,0 % Customer & worker tidak bertemu 46,6 % 12,2 % 34,4 % - - 14,6 % Perbedaan 47 > 50 % BLACK CUSTOMER Customer Discrimination and NBA Lawrence Kahn and Peter Sherer 1998) : A study of attenance records indicates that replacing a black player with an eqqually talented white player bring in about 9,000 additional fans per year. At $50 a head (a very conservative estimate of ticket prices and concession revenues), the racial switch would increase annual team revenues by roughly $450,000 48 Measuring Discrimination 49 Measuring Discrimination Asumsi : Tenaga kerja terdiri dari ___ • Male, dengan average wage WM ___ • Female, dengan average wage WF Diskriminasi : selisih average wage, yaitu : ___ ___ ___ W WM WF 50 Measuring Discrimination Pengembangan model : Schooling mempengaruhi pendapatan Earning Function : • Male : w M • Female M 51 : M M SM wF F F SF menyatakan pendapatan pria meningkat bila mendapatkan tambahan 1 tahun pendidikan. Measuring Discrimination Model Regresi : ___ ___ ___ W WM WF M M s M F F s F 52 Measuring The Impact of Discrimination on the Wage Men’s Earning Dollars Men’s Earning Men’s Earning Function ___ WM Women’s Earning Function Women’s Earning w * F M Woman’s Earning 53 Measure Discrimination : ___ ___ *Schooling Women’sMen’s Schooling wF WF F __ __ sF sM WF Schooling Trend in Female-Male Wage Ratio (USA 1930-1990) 0.72 0.69 0.66 0.63 0.60 0.57 0.54 1930 1940 1950 1960 Year 54 1970 1980 1990 Global Gender Gap 2007 INDONESIA Rank 2007 : 81 Score 2007 : 0.6550 ( 1 = equality ) Rank 2006 : 68 Score 2007 : 0.6541( 1 = equality ) 55 Global Gender Gap 2007 56 Global Gender Gap 2007 INDONESIA 57 Terima kasih… 58