Labour market discrimination and the macroeconomy

Muhammad Asali; Rusudan Gurashvili

doi:10.1111/ecot.12249

Labour market discrimination and the macroeconomy

Muhammad Asali^*
, Rusudan Gurashvili

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

6 Scopus citations

Abstract

We measure the discriminatory ethnic and gender wage gaps in Georgia. Gender wage discrimination is larger than the ethnic wage discrimination. We use the estimated gaps in a general-to-specific vector autoregression framework to test for Granger causality between discrimination and growth, and estimate the long-run effects of each variable on the other. Granger causality is found to be bidirectional, but it is only the net long-run effect of discrimination on growth that is a large and highly significant negative effect. In the long-run, a 10% increase in ethnic (gender) discrimination reduces economic growth by 3%–4% (8%–10%). Additionally, ethnic and gender wage differentials are found to be counter-cyclical.

Original language	English
Pages (from-to)	515-533
Number of pages	19
Journal	Economics of Transition and Institutional Change
Volume	28
Issue number	3
DOIs	https://doi.org/10.1111/ecot.12249
State	Published - 1 Jul 2020
Externally published	Yes

Bibliographical note

Publisher Copyright:
© 2020 The Author. Economics of Transition and Institutional Change © 2020 The European Bank for Reconstruction and Development

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 1 No Poverty
SDG 5 Gender Equality
SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

Keywords

Granger causality
ethnic
gender
growth
labour market discrimination
labour market tightness
transition economies

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10.1111/ecot.12249

Cite this

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abstract = "We measure the discriminatory ethnic and gender wage gaps in Georgia. Gender wage discrimination is larger than the ethnic wage discrimination. We use the estimated gaps in a general-to-specific vector autoregression framework to test for Granger causality between discrimination and growth, and estimate the long-run effects of each variable on the other. Granger causality is found to be bidirectional, but it is only the net long-run effect of discrimination on growth that is a large and highly significant negative effect. In the long-run, a 10\% increase in ethnic (gender) discrimination reduces economic growth by 3\%–4\% (8\%–10\%). Additionally, ethnic and gender wage differentials are found to be counter-cyclical.",

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Labour market discrimination and the macroeconomy

Abstract

Bibliographical note

UN SDGs

Keywords

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