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A monopsonistic approach to disability discrimination and non-discrimination

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  • Eirini-Christina Saloniki

    (Academic Unit of Health Economics, University of Leeds)

Abstract

We use a simple model of monopsony to explain wage differences between the non-work-limited disabled and non-disabled. In this model, employers exploit the non-work-limited disabled workers and potential workers by offering them lower wages to increase profits, knowing that they face high search costs. We propose an extension of this model to account for the case where firms are not allowed, by law, to treat disabled and non-disabled differently. We show that non-discrimination improves the wage distribution for the non-work-limited disabled workers but worsens it for the non-disabled.

Suggested Citation

  • Eirini-Christina Saloniki, 2015. "A monopsonistic approach to disability discrimination and non-discrimination," Economics Bulletin, AccessEcon, vol. 35(4), pages 2064-2073.
    • Handle: RePEc:ebl:ecbull:eb-15-00459
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    disability; discrimination; monopsony; wages;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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