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Labour Market Performance Effects of Discrimination and Loss of Skill

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Author Info

  • Larsen, Birthe

    ()
    (Department of Economics, Copenhagen Business School)

  • Waisman, Gisela

    (Stockholm University)

Abstract

We examine the impact of discrimination on labour market performance when workers are subject to a risk of losing skills during the experience of unemployment. Within a search and matching model, we show that all natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment increases in the other sector. Discrimination may induce immigrants to train more or less than natives, depending on the sector where it is present. Welfare tends to be most negatively affected by discrimination among high- productivity workers.

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File URL: http://hdl.handle.net/10398/8520
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Bibliographic Info

Paper provided by Copenhagen Business School, Department of Economics in its series Working Papers with number 05-2012.

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Length: 35 pages
Date of creation: 15 Oct 2012
Date of revision:
Handle: RePEc:hhs:cbsnow:2012_005

Contact details of provider:
Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Phone: 38 15 25 75
Fax: 38 15 34 99
Email:
Web page: http://www.cbs.dk/departments/econ/
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Related research

Keywords: discrimination; unemployment; search and matching; wages;

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Cited by:
  1. Daniel Borowcyzk-Martins & Jake Bradley & Linas Tarasonis, 2014. "Racial Discrimination in the U.S. Labor Market: Employment and Wage Differentials by Skill," Bristol Economics Discussion Papers 14/637, Department of Economics, University of Bristol, UK.

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