LABOUR MARKET

INEQUALITIES
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 LABOUR MARKET
SEGMENTATION 1
 We follow the hypothesis -
well known in the socio-
economic literature and in
contrast with the neo-classical
economics - that there is no
single labour market based on
the pure exchange between
supply and demand
 On the contrary, we can
identify a range of segments
that differentiate the
employment positions
hierarchically, in
correspondence with their
individual characteristics and
professional profiles
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 LABOUR MARKET
SEGMENTATION 2
 In order to explain how the labour market works and the
persistence of labour inequalities, we consider the theoretical
perspective of segmentation:
the adjustment between supply and demand - as a result of
competitive allocation based on wage productivity, technological
changes and trends in economic growth - is an insufficient
explanatory mechanism to account for:
differences in wages and career paths
unequal positions, measured by work conditions and job quality
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 SEGMENTATION:
DEMAND-SIDE AND SUPPLY-
SIDE
Demand Side
In the perspective of segmentation, the
demand side must be viewed as
fundamental: at the centre are found
business strategies for the organisation of
production and labour (especially
flexibilization, outsourcing and
subcontracting) that, seeking to maximise
profits by minimising costs and controlling
the workforce, generate unequal labour
conditions and opportunities for the
working population, and consequently for
their careers
Supply side
However, inequalities are also
reproduced and arise in interaction with
the supply side. Certain social
characteristics of workers hired both
formally and informally- (class, gender,
age, immigrant origin or race) are
unevenly distributed and overlapped
according to the configuration of
segmented jobs, favoring the ultimate
goals of employers
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 LM INEQUALITIES AS A
SOCIAL PRODUCT
 Inequalities are thus constructed socially, creating hierarchical
employment segments and career paths
 of greater or lesser quality
 filled by people from different social profiles, which the
segmentation literature has identified in terms of LM Duality,
differentiating between a primary and a secondary segment
 Dual Labour market has been raised in numerous contributions
since the 1970s, including among others Doeringer & Piore
(1971), Rubery (1978), Gordon, Edwards & Reich (1982),
Wilkinson (1981), Craig et al. (1982), Grimshaw & Rubery
(2005), Rubery (2005, 2007)
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 DUAL LABOUR MARKET
THEORIES 1
 Over time the economic process divided the labour market into two sectors:
 the primary sector consisting in well-paid and stable jobs, career
opportunities, unionization and good working conditions
 the secondary sector characterized by low-paid and temporary jobs, poor
working conditions and few chances of advancement
 Through the construction of internal labour markets (ILMs) as an
organizational tool, companies perpetuate stability for primary sector workers,
in order to face the uncertainty of demand
 Hence, wage structure, employment conditions and segmentation do not
exclusively derive from individual attributes but also from demand-side
drivers, such as employers’ attitudes or the broader structure of the economy
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 DUAL LABOUR MARKET
THEORIES 2
All these theories assume three recurrent conditions:
First, there is not a single labour market but a division of the labour
force into two or more segments that structure hierarchical positions
corresponding to specific occupational profiles among workers
Second, there is limited mobility between segments
 Third, the differences in working conditions cannot only be attributed
to differences in productivity
One of the recurrent inequalities - based on individual attributes - is
gender related
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 GENDER-RELATED
INEQUALITIES
A sexual division of labour exists in all cultures, as illustrated by anthropological
research (Mead 1949)
It is a universal phenomenon, but the assignment of jobs to men and women varies
in different cultures
Since the 1960s, historical and sociological research has tried to explain the sexual
division of labour
The focus was on the complex interaction between reproductive and productive
activities for the wage economy during industrialization first and subsequently in
contemporary society, driven by the service sectors
Following mainstream neoclassical economics, the principal cause of gender
inequality and segregation in the labour market is explained by the human capital
theory

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION

 HUMAN CAPITAL THEORY CAN EXPLAIN GENDER INEQUALITY?
HC theory:
the position of men and women in work and
employment is different because they have
different preferences, different dispositions
to invest in their human capital, such as
education, training and preparation for work
in general, and different attitudes towards
work itself (Hakim 2000)
Recent studies have highlighted other
aspects, such as differences in
competitiveness and risk-taking (Hoffman
and Averett 2016)
 Hence, the economists possessed a strong
interpretative paradigm to explain inequality
Critics of HC Theory:
It is unable to explain:
1)why preferences differ among women
2) why they can change over time
3) how they vary depending on the
circumstances and institutional varaities
The original risk of this theory is to
justify inequality based on individual
orientation, as if the preferences were
not shaped by social norms or cultural
stereotypes
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 THE LIMITS OF HC THEORY
AND THE NEO-INSTITUTIONAL APPROACH
 The human capital model began to show its limits when
women reached equal or higher educational levels than men
 In all developed countries, raising female education has reduced gender
inequalities in activity rates, but clear effects of the gender gap, segregation and
discrimination are still evident
A vast, especially neo-institutionalist literature (Colette Fagan, Jill Rubery, Mary
Daly, Rosemary Crompton, Florence Jaumotte) has shown that:
 more than male participation
 female participation is conditioned by national institutions, such as
welfare regimes, social policies or employment protection legislation

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION

 WOMEN MASS
ENTRY IN THE
LABOUR
MARKET
Women’s mass entry into the
labour market since the 1980s has
been the most revolutionary
change in developed economies,
with effects on:
 rise of dual-income families
 demand for services
 demographic trends
Female labour supply is influenced -
more than that of men - by redistributive
(or post- distributive) policies via:
services (for children and old parents)
reconciliation measures and other
incentives
characteristics of labour demand and
economic sectors
organizational environment (managerial
culture, socialization models, diversity m., working
time)
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 GENDER
INEQUALITIES
IN THE EU LM
In almost all the European Member
States - despite increasing in the last
decades –
• employment and participation rates
for women are still systematically
lower than for men
• unemployment and, especially,
inactivity rates are higher, particularly
in the case of women with care
responsibilities
 The gender gap remains significant
In southern Europe:
- part-time work is largely involuntary
- often associated with short hours and marginal,
low-paid jobs (particularly common among low-
skilled women)
-part-time work is also one of the key factors
contributing to the existing gender pay gap (as
these jobs tend to be associated with lower hourly
pay)
- fewer career opportunities
- less social protection (unemployment benefits or
pension) compared to full-time jobs
- higher incidence in temporary jobs and in lower
pay sectors and occupations than men
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
Employment/population ratio 2015 (OECD data)
  Women Men
Austria 67,1 75,1
Belgium 58,0 65,5
Czech Republic 62,4 77,9
Denmark 70,4 76,6
Estonia 68,4 75,4
Finland 67,7 69,7
France 61,1 67,5
Germany 69,9 78,0
Greece 42,5 59,3
Hungary 57,8 70,3
Ireland 57,6 68,7
Italy 47,8 66,5
Latvia 66,4 69,9
Netherlands 69,2 79,0
Poland 56,6 69,3
Portugal 61,1 66,9
Slovak Republic 55,9 69,4
Slovenia 61,0 69,2
Spain 53,4 64,0
Sweden 74,0 77,0
United Kingdom 68,6 77,9
OECD countries 58,6 74,2
Lithuania 66,5 68,0
European Union 28 60,7 71,2
Bulgaria 59,8 65,9
Romania 53,2 69,5
Labour force participation by gender 2015 (OECD data)
  Women Men
Austria 70,9 80,1
Belgium 63,0 72,2
Czech Republic 66,5 81,4
Denmark 75,3 81,6
Estonia 72,9 80,4
Finland 74,4 77,4
France 67,6 75,5
Germany 73,1 82,1
Greece 59,9 75,9
Hungary 62,2 75,3
Ireland 62,8 77,6
Italy 54,9 75,2
Latvia 72,8 78,9
Netherlands 74,7 84,6
Poland 61,4 74,8
Portugal 70,3 76,7
Slovak Republic 64,3 77,5
Slovenia 67,9 75,4
Spain 70,0 80,9
Sweden 79,9 83,5
United Kingdom 72,5 82,8
OECD countries 63,0 79,8
Lithuania 72,5 75,8
European Union 28 67,1 78,6
Bulgaria 65,4 73,2
Romania 56,7 75,3
EMPLOYMENT RATE BY GENDER 2015
SUMMING UP
Although the growth of female employment is one of the
most significant phenomena of the labor markets in
advanced societies
 their performance in the labor market still remains
worse than that of men
also ethnic minorities have worse conditions in the
OECD area labor markets than those of majority groups

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION

 OBSERVABLE INEQUALITIES IN THE LMK
IMPORTANT TO KNOW that:
Men and women do not have the same jobs
They are not employed in the same sectors (women are
overrepresented in few activity sectors (textile manufacturing,
tertiary/service sectors, personal services) and under-represented
in STEM
in specific occupations (teachers, employees, nurses)
characterized by low salary levels
They have different career progressions
They do not have the same characteristics (age, seniority in work,
family responsibilities) R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
GENDER EMPLOYMENT SEGREGATION- ACTIVITY SECTORS
 GENDER SEGREGATION

There are two types of recognised segregation in the workplace:

horizontal and vertical
 both are seen as contributing to gender inequality and to the
gender pay gap
 the European Commission points to occupational segregation
as one of the causes of the gender pay gap, as women and men
still tend to work in different sectors and jobs

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION

 HORIZONTAL
SEGREGATION
Horizontal segregation
 can be broadly defined as the
concentration of men and women
in different kinds of jobs;
 is understood as ‘the under-
representation or over-
representation of a given group
in occupations or sectors not
ordered by any criterion
.”...horizontal segregation is where the
workforce of a specific industry or sector is
mostly made up of one particular gender (an
example of horizontal segregation can be found in
construction, where men make up the majority of the
industry’s workforce, whereas childcare is almost exclusively
a female occupation)
Horizontal segregation in practice means that
women are typically over-represented in sectors
or occupations that often offer lower rates of pay
 They also require skill levels that are rated
lower than those required by sectors and
occupations in which men are over-represented
This is considered to be a major contributory
factor to the gender pay gap in the EU
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 VERICAL
SEGREGATION
Vertical Segregation
denotes the situation whereby
opportunities for career
progression for a particular
gender within a company or
sector are limited
This can contribute to a range of gender-
related inequalities such as:
 for example, the gender pay gap
 In its report on New and Emerging Risks
and Health and Safety, EU-OSHA warns that
vertical and horizontal segregation can have
serious implications for occupational
segregation in terms of the risks to which
the different genders are exposed
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 GENDER PAY
GAP
In spite of more than thirty years of
equal pay legislation
• the gender pay gap has persisted
across all Member States
• regardless of the overall level of
female employment (Vosko et al.
2009)
According to Eurostat, in 2017, women's gross hourly
earnings were on average 16.0% below those of men in
the EU28, with wide differences between the countries
 A part of the pay gap is related to the differences in the
average characteristics of working men and women such
as: age, education, occupation, economic activity,
employment contract, work hours, job experience, firm
size, or employment in the private versus the public sector
 Recent estimations have shown that these factors explain
a small part of the gender pay gap
 Eurostat estimates (based on the 2014 Structure of
Earnings Survey microdata) that, at the EU level, only
31% of the difference between men and women’s hourly
earnings can be attributed to the difference in the observed
personal and job characteristics (mentioned above
 The remaining two thirds are likely to be caused by
career breaks following childbirth and discrimination in
hiring, career progression and labour market opportunities
(OECD 2017; Boll, Rossen and Wolf 2017)
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
 MEASURE GENDER EMPLOYMENT GAP
AND PAY GAP
How are gender segregations measured?
FEMINIZATION RATE: Share of women in total employment in the sector,
qualification, employment position
Statistical techniques allow to decompose the (gender) GAP into its two
components:
Differences in the composition of the male and female workforce - Gender
employment gap
Differences in remuneration of individual and occupational characteristics
- Gender Pay Gap = average hourly wages of F and M (% of male hourly
wages)
(the gap increases if we consider the wages on a monthly or annual basis)

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION

 A MATTER OF
DISCRIMINATION
The differences in wages between W and M must be interpreted as
the result of a comparison between two populations of workers with
different characteristics
but
even if, statistically, the effects of worker characteristics are
separated from how these characteristics are evaluated (ie paid)
the results show that - although the composition of the workforce
between the sexes (with respect to personal and occupational
characteristics) were identical
there remains a considerable pay gap between women and men
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
A MATTER OF
DISCRIMINATIO
N behind these wide and persistent disparities:
In other words:
 The work done by women
(despite having a higher average
level of education) is valued less
than the work done by men
 When a sector becomes
feminized, wages tend to drop
 Education performance tends to
be lower for women
Empirical evidence indicates that (in addition
to the factors that determine labor supply patterns)
discrimination may be one of the forces
 About ¼ of the observed disparities
remain unexplained
DEFINITION OF DISCRIMINATION
Discrimination = Unequal treatment of an
equal productivity of individuals only
because of their belonging to a specific
group
(women, ethnic-religious-race, nationality, political
orientation, sexual orientation, young people, elderly
workers)
R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION
The next lesson will be
on:
Economic theories of
discrimination

R. SEMENZA EMPLOYMENT, INEQUALITIES AND DISCRIMINATION