While known for a great many contributions to economics, Barbara Bergmann is widely credited for the occupational crowding hypothesis, which she presented formally in a 1971 publication.
Bergmann’s theoretical demonstration of the hypothesis indicated that because Black men are discriminated against and crowded into a comparatively small number of occupations, the competition and labor supply in White-dominated occupations is artificially reduced. This reduction in labor supply in ‘White occupations’ drives up the relative wage of White workers, while the earnings of Black men are reduced as they are shunted into only a handful of occupations. Bergmann then explained how a lessening of the crowding effect would lead to a slight decrease of White wages: as Black men are allowed to compete with White men for jobs they were previously excluded from, this increase in labor supply would reduce the price of labor (wages) of White men who previously dominated the occupation. However, as Bergmann showed, this type of occupational integration but would increase both the national output and wages for Black workers. [1]
The 1971 crowding hypothesis was published during the height of neoclassical debates on the economics of discrimination. Bergmann’s hypothesis stood alongside theories from Becker’s, Arrow’s, and Thurow’s as the key contributions of the time. And while the crowding hypothesis seemed to be a novel theoretical contribution to many at the time, Bergmann herself acknowledged that the hypothesis was not solely her own.
Who was discussing versions of the occupational crowding hypothesis before Bergmann? Several economists: including Fawcett, Edgeworth, and Myrdal to name a few. Bergmann herself wrote that the idea “takes off from an idea expressed by Edgeworth (1922).”[1] Indeed, in his 1922 article titled “Equal Pay to Men and Women for Equal Work,” Edgeworth wrote, “The pressure of male trade unions appears to be largely responsible for that crowding of women into a comparatively few occupations, which is universally recognised as a main factor in the depression of their wages. Such crowding is prima facie a flagrant violation of that free competition which results in maximum production.”[2] Using the same logic as Bergmann, Edgeworth to suggested that as long as there are occupations which only women enter or only men enter, women will be paid less than men for doing the same work, and men’s wages will benefit from this reduced competition.[2] He argued for free competition between men and women in all occupations, not just for the sake of raising women’s wages, but also for improving productive efficiency in the economy.
While Bergmann gave Edgeworth primary credit for her 1971 conceptualization, Bergmann missed the work that inspired Edgeworth. Edgeworth’s conceptualization of the crowding hypothesis drew largely from feminist activist and scholar Millicent Fawcett. Bergmann realized this later in her life. In 1994, Kenneth Arrow was rereading Edgeworth’s work, became aware of Edgeworth’s citations of Millicent Fawcett’s work, and wrote to Bergmann to alert her of this omission. Bergmann replied to Arrow and wrote, “I was pleased with your revival of the contribution of Millicent Fawcett, but mortified that I had neglected it.”[3]
In her 1918 piece “Equal Pay for Equal Work,” Fawcett wrote specifically about the role of competition and occupational crowding: “if demand for a particular class of labor is either destroyed or very much restricted, a ‘downward pull’ on wages is called into existence for the whole class. Let it be supposed that trade union rules, plus employers' prejudices and social custom, prevented natives of the Isle of Wight from being allowed to engage in skilled industry: you would at once call into existence a tremendously depressing effect upon the wages of all the islanders whether skilled or unskilled. The unskilled trades open to them would be overcrowded, and competition among the workers might well force down wages to less than subsistence level.”[4]
Both Fawcett and Edgeworth pointed to examples of union exclusion when discussing occupational crowding. This may be because union members had a very firm grasp on the understanding that excluding women and Black workers meant maintaining their higher wages. Edgeworth even cited a court case in which a male union member, when asked why women cannot steer a barge, outright replied that the inclusion of women reduces the wages of men.
Bergmann’s application of Fawcett’s and Edgeworth’s work on gender discrimination to race-based discrimination was relatively novel: most of the literature on the economics of discrimination of the 1960s and 1970s had to do exclusively with race-based discrimination, and only sometimes made brief notes on how the theories could be applied to gender discrimination as well. Furthermore, evidence of economists applying the crowding hypothesis to racial discrimination before Bergmann is limited. A great deal of sociologists were considering the impact of occupational crowding on Black workers’ wages, but economists largely were not. However, Gunner Myrdal, whose 1944 book An American Dilemma inspired Bergmann when she was an undergraduate, wrote something similar to that of Edgeworth and Fawcett. He wrote, “By excluding Negroes from the competition for jobs, the white workers can decrease the supply of labor in the market, hold up wages and secure employment for themselves.”
Myrdal also emphasized that “To give white workers a monopoly on all promotions is, of course, to give them a vested interest in job segregation.” Like Bergmann, Myrdal recognized that White workers would be proponents of occupational segregation and discrimination in order to keep their own wages high. Bergmann’s piece, which is titled “The Effect on White Incomes of Discrimination in Employment,” was largely undertaken in order to provide “valuable ammunition with which to allay fears and promote fairer arrangements.” Bergmann went through an entire empirical exercise to demonstrate that the wage losses to White workers would be limited to less educated White workers, that these wage losses will be minimal, and will ultimately be offset by an increase in national income.
Bergmann’s recognition that discrimination is both rational and profitable from the perspective of White workers was against the grain of neoclassical theories of labor market discrimination. Becker’s (1957) work, which was the trendsetter among neoclassical economists, argued that competition would drive out discriminatory firms.[5] Bergmann, on the other hand, identified the reasons by which discrimination would be economically beneficial to maintain for certain groups. While some heterodox and ‘radical’ economists were making similar arguments, Bergmann was able to successfully penetrate the main paradigm by illustrating this phenomena using neoclassical tools similar to that of Becker’s theories.
With economists as famous as Edgeworth and Myrdal writing about the occupational crowding hypothesis, it is remarkable that Bergmann is the one credited with the hypothesis. This may be for several reasons. It may be Bergmann’s decision to bring together literatures on race and gender brought the hypothesis to a larger audience: Bergmann was among the first to cite and expand upon Edgeworth’s 1922 work on gender discrimination in a theory on race discrimination, thus bringing together two seemingly separate social phenomena. Another reason why Bergmann may be credited is because she was the first to formulate the theory mathematically, and used tools, methods, and ideas familiar to neoclassical economists. This is related to the timing at which she published it: in the 1960s and 1970s neoclassical economists were heavily debating the economics of discrimination. Bergmann’s crowding hypothesis contributed to that debate by bringing previously held ideas about occupational crowding to the forefront using neoclassical economists’ tools.
References: [1] Bergmann, B. R. (1971). The effect on white incomes of discrimination in employment. Journal of Political Economy, 79(2), 294-313. [2] Edgeworth, F. Y. (1922). Equal pay to men and women for equal work. The Economic Journal, 32(128), 431-457. [3] Correspondence with Barbara Bergmann, 1994-2006. Kenneth Arrow Papers (Box 2), David M. Rubenstein Rare Book & Manuscript Library, Duke University. [4] Fawcett, M. G. (1918). Equal pay for equal work. The Economic Journal, 28(109), 1-6. [5] Becker, G. S. (1957). The economics of discrimination. University of Chicago Press.
Sarah F. Small is a PhD candidate in economics at Colorado State University. She also works for the journal Feminist Economics as a graduate fellow and is a visiting researcher at Duke University’s Center for the History of Political Economy. She tweets at @sarahfsmall and can be contacted via email at sarah.small@colostate.edu.