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Studies on wage discrimination assume that independent observers are able to distinguish a priori which workers are suffering from discrimination. However, this may not be a good assumption when anti-discrimination laws mean that severe penalties can be imposed on discriminatory employers or when unobserved heterogeneity is significant. We develop a wage discrimination model in which workers are not classified a priori. It can be thought of as a generalization of the standard empirical framework, whereas the Oaxaca–Blinder model can be thought of as an extreme case. We propose a finite mixture model to explicitly model unobserved heterogeneity in individual characteristics and estimate the probabilities of being a discriminated or a non-discriminated worker. We illustrate this proposal by estimating wage discrimination in Germany and the UK.

This chapter examines the relative influence of parents (vertical channel) and friends (horizontal channel) when deciding between employment in the public or private sector. Using a novel database and applying network analysis, the influence of peers is first measured. Next, the peer effect is compared with the impact of parental background on individual preferences. For the private sector, findings indicate that the influence (marginal effect) of friends is greater than that of parents. The opposite is observed for the public sector. However, in the case of public sector employment, the overall effect of the horizontal channel may surpass the vertical channel, as individuals typically have two parents but may have many friends. Additionally, it is found that both parents and friends exert a greater influence on women than on men.

Purpose – We attempt to incorporate the effect of changes in circumstances over time, which are usually approximated by parental education or occupation. We claim that the relative level of parental schooling is a better measure than the absolute level of education since parents' circumstances change dramatically in a society where schooling patterns change rapidly.

Methodology – We control for parental cohorts of education for a given father's age. We also test the sensitivity of the results under the ex post and the ex ante approaches.

Findings – We find that the cohort effect is generally negative. We also provide some insights into the differences between the ex ante and the ex post approaches and investigate the convergence of both methodologies as the number of tranches, tends toward one.

Originality – Besides including parents' education changes over time, we illustrate that for Chile in 2009, the ex ante approach increases the level of inequality of opportunity compare to the ex post approach.

The purpose of this paper is to analyse to what extent religious beliefs, understood as part of an individual ' s cultural background, can explain an individual ' s willingness to work. In particular the paper links individuals’ willingness to increase their working time with their religious denomination and their religious commitment. This relationship is studied in six European countries that have different religious structures: two countries with two significant religious groups (Germany and France), two Catholic countries (Ireland and Poland) and finally, two Lutheran states (Norway and Sweden).

Using data provided by the International Social Survey Programme 2007 – “Leisure Time and Sports” module [ISSP-2007], the paper estimates ordered probit models for each country separately.

The paper finds that there is not a unique link between religious beliefs and habits and the self-declared inclination to devote more time to paid work. First, the paper finds a positive association between religious involvement and an individual ' s self-declared willingness to work in Catholic-dominated countries. Second, this relationship is less pronounced in Protestant countries, where non-religious people are less inclined towards paid work than Protestants. Third, in France, Catholics are the most inclined towards paid work, especially those with high levels of religious involvement. Finally, the paper does not find any significant difference between Catholics and Protestants in Germany.

The role of religion has been largely ignored in economics for decades. This paper adds to the growing literature on the effects of religious beliefs and behaviour on economic outcomes.

Individuals are completely responsible for their outcomes (income, utility, health and so on) and, therefore, total inequality is due to individual responsible choices. This view has been challenged by philosophers and economists for the last three decades since the magnum opus by John Rawls (1971). These authors have argued that individuals are only responsible for their own efforts, and, therefore, people should be compensated for a variety of circumstances beyond their control. The meritocracy approach rejects the existence of circumstances and, in accordance with this, considers that total inequality is due to inequality of effort. On the contrary, the equality of opportunity approach recognizes the existence of factors that affect individuals and over which they have no control. For the former approach, the relevant equilizandum is individual freedom of access to education, positions and jobs. For the latter approach, the relevant equilizandum is the set of available opportunities to acquire those attributes required to compete for a position or job.

There are conflicting views of the primary role of income inequality in economic development. Many expect that higher income shares at the top reflect substantial economic contributions while others think that these increases in top shares have not translated into higher economic growth. Recently, this debate has been reinvigorated by a new proposal: higher income inequality could hurt economic performance by decreasing future intergenerational mobility. We contribute to this debate by examining the relationship between intergenerational perceived job status mobility and past income inequality. We find a robust negative association of lagged income inequality with upward intergenerational job status mobility and a robust positive association of lagged income inequality with downward intergenerational job status mobility. In addition, we find that the quality of political institutions and religious fractionalization both contribute positively to job status mobility. Higher levels of past Gross Domestic Product (GDP) result in less upward job status mobility and more downward job status mobility.

Economic mobility means different things to different people, but four major classes of mobility measures have been identified in the literature: positional, directional, mobility as an equaliser of long-term earnings, and earnings risk (or flux). We illustrate some advantages of a multifaceted approach by comparing German and American earnings mobility using multiple indices from each of the four major classes for three panels of 10-year intervals. We anticipate and confirm that due to extensive differences in the German and American labour markets and in other social institutions that influence labour market outcomes, each country dominates in one facet of mobility but not in the others. Thus, a multifaceted approach contributes to a better understanding of the strengths and weakness of the two systems.