Wage Discrimination in the Reemployment Process

This paper examines wage discrimination by gender in the reemployment market by looking at the experiences of unemployed individuals and decomposing their wage gap upon reemployment. The Neumark decomposition technique is extended to incorporate selectivity and counter-factual estimates are used to explain the development of the wage gap over time. Whereas total discrimination upon reemployment is declining over time, the part directly attributable to hiring is increasing. Policy-makers should consider that employers, constrained by existing legislation that does not address hiring issues directly, are switching over to discriminatory hiring practices that are becoming relatively easier to adopt, less likely to be detected and harder to prove in a court of law.