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Statistical Discrimination and Efficiency

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  • Peter Norman

Abstract

This paper asks whether statistical discrimination is a market failure. I consider the problem for a utilitarian social planner who operates in an environment that can generate statistical discrimination as an equilibrium phenomenon. It is found that there are potential efficiency gains from discrimination in terms of reduced "mismatch" between workers and jobs. Whether the solution to the planning problem involves discrimination depends on the trade-off between the informational gains of specialization and the losses in terms of increased investment costs. Copyright The Review of Economic Studies Limited, 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Economic Studies.

Volume (Year): 70 (2003)
Issue (Month): 3 (07)
Pages: 615-627

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Handle: RePEc:bla:restud:v:70:y:2003:i:3:p:615-627

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Cited by:
  1. Dragos BIGU, 2009. "Discrimination and Profit," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(5), pages 1021-1027, December.
  2. Pfeifer, Christian & Sohr, Tatjana, 2008. "Analysing the Gender Wage Gap Using Personnel Records of a Large German Company," IZA Discussion Papers 3533, Institute for the Study of Labor (IZA).
  3. Lommerud, Kjell Erik & Vagstad, Steinar, 2006. "Mommy tracks and public policy: on self-fulfilling prophecies and gender gaps in promotion," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-10, Social Science Research Center Berlin (WZB).
  4. Fang, H. & Norman, P., 2001. "Government-Mandated Discriminatory Policies," Research Institute of Industrial Economics Working Papers 562, Research Institute of Industrial Economics (IFN).
  5. Shubham Chaudhuri & Rajiv Sethi, 2003. "Statistical Discrimination with Neighborhood Effects: Can Integration Eliminate Negative Stereotypes?," Game Theory and Information 0312001, EconWPA.
  6. Kim, Young Chul & Loury, Glenn, 2009. "Group Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 18765, University Library of Munich, Germany.
  7. Raymond Fisman & Daniel Paravisini & Vikrant Vig, 2012. "Cultural Proximity and Loan Outcomes," Working Papers id:5036, eSocialSciences.
  8. Sergey V. Popov & Dan Bernhardt, 2012. "Fraternities and Labor-Market Outcomes," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 116-41, February.
  9. Lars Calmfors & Giancarlo Corsetti & Seppo Honkapohja & John Kay & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2004. "The Economics of Discrimination: Equity, Equality and Diversity in the New European Constitution," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 84-95, October.
  10. Hanming Fang, 2001. "Social Culture and Economic Performance," American Economic Review, American Economic Association, vol. 91(4), pages 924-937, September.
  11. Nicola Persico, 2002. "Racial Profiling, Fairness, and Effectiveness of Policing," American Economic Review, American Economic Association, vol. 92(5), pages 1472-1497, December.
  12. Bøg, Martin & Kranendonk, Erik, 2011. "Labor market discrimination of minorities? yes, but not in job offers," MPRA Paper 33332, University Library of Munich, Germany.

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