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Different types of labour

Different types of labour. Hourly earnings in the UK 2000. In both manual and non-manual occupations, men are seen to earn more than women. Does this mean there is discrimination?. Sources of differential pay. Education and training Job experience Race and gender Trade union membership.

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Different types of labour

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  1. Different types of labour

  2. Hourly earnings in the UK 2000 • In both manual and non-manual occupations, men are seen to earn more than women. • Does this mean there is discrimination?

  3. Sources of differential pay • Education and training • Job experience • Race and gender • Trade union membership

  4. Human capital • The stock of expertise accumulated by a worker • It is valued for its income-earning potential in the future • A form of investment

  5. Age-earnings profiles • Age-earnings profiles show how typical earnings vary with age and educational qualifications • education induces a differential • which tends to increase with age. University degree or equivalent Income A-level or equivalent No formal qualifications Age

  6. Trade unions • Worker organisations designed to affect pay and working conditions. • A closed shop • an agreement that all the firm's workers will be members of a trade union. • A trade union may raise wages by restricting labour supply.

  7. D' D W1 Given industry demand for labour DD, equilibrium is at E0. E0 By restricting labour supply to N1, the union can increase wage to W1 D D' N1 N0 Unions in the labour market Wage With no union, the industry faces a horizontal labour supply curve at the wage W0. W0 The differential is larger for any given reduction in industry employment, the more inelastic is industry labour demand Employment

  8. Discrimination? • Women and non-whites on average receive lower incomes than white males. • Women and non-whites are concentrated in relatively unskilled jobs with fewer opportunities for promotion. • This need not reflect blatant sexism or racism by employers ...

  9. Discrimination? (2) • It may reflect • educational or other disadvantages before young workers reach the labour market • a low perceived rate of return for firms on money spent in training such workers. • Only if we allow for all these effects can we show discrimination in the labour market.

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