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Discrimination, Quotas, and Stereotypes

Author

Listed:
  • Lennart Struth

    (University of Cologne)

  • Max Thon

    (University of Cologne)

Abstract

We analyze the effect of employment-quota policies on the development of uncertainty and stereotypes in a model of inaccurate statistical discrimination with ambiguity about worker abilities. We show that, even if group characteristics are identical, higher uncertainty about one group can result in discriminatory employment decisions. The success of a quota in correcting the beliefs then depends crucially on the firm’s learning process. In particular, we find that the more confident the firm is in its initial priors, the longer a quota needs to be implemented until beliefs are sufficiently corrected such that discriminatory behavior vanishes.

Suggested Citation

  • Lennart Struth & Max Thon, 2022. "Discrimination, Quotas, and Stereotypes," ECONtribute Discussion Papers Series 188, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:188
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Statistical discrimination; stereotypes; quotas; ambiguity;
    All these keywords.

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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