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Search, Bargaining, and Employer Discrimination

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  • Asa Rosen

    (Swedish Institute for Social Research, Stockholm University)

Abstract

This article analyzes Becker's ([1957] 1971) theory of employer discrimination within a search and wage-bargaining setting. Discriminatory firms pay workers who are discriminated against less and apply stricter hiring criteria to these workers. The highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and management are separated, both highest profits and highest utility can be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry or takeovers, do not ensure that wage differentials due to employer discrimination disappear.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 21 (2003)
Issue (Month): 4 (October)
Pages: 807-830

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Handle: RePEc:ucp:jlabec:v:21:y:2003:i:4:p:807-830

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  1. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  2. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
  3. Rosen, Asa, 1997. "An equilibrium search-matching model of discrimination," European Economic Review, Elsevier, vol. 41(8), pages 1589-1613, August.
  4. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1998. "Market Forces and Sex Discrimination," Labor and Demography 9807002, EconWPA.
  5. Bowlus, Audra J & Eckstein, Zvi, 1998. "Discrimination and Skill Differences in an Equilibrium Search Model," CEPR Discussion Papers 1859, C.E.P.R. Discussion Papers.
  6. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
  7. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
  8. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
  9. Sattinger, Michael, 1996. "Search and discrimination," Labour Economics, Elsevier, vol. 3(2), pages 143-167, September.
  10. Masaru Sasaki, 1998. "An Equilibrium Search Model with Co-Worker Discrimination," Labor and Demography 9802001, EconWPA.
  11. Pissarides, C A, 1984. "Efficient Job Rejection," Economic Journal, Royal Economic Society, vol. 94(376a), pages 97-108, Supplemen.
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  13. repec:dgr:uvatin:1998112 is not listed on IDEAS
  14. Joni Hersch, 1991. "Equal Employment Opportunity Law and Firm Profitability," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 139-153.
  15. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April.
  16. James F. Ragan & Carol Horton Tremblay, 1988. "Testing for Employee Discrimination by Race and Sex," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 123-137.
  17. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-90, September.
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