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Discrimination and Employment Protection

Author

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  • Holden, Steinar

    (Dept. of Economics, University of Oslo)

  • Rosén, Åsa

    (Stockholm University (SOFI))

Abstract

We study a search model with employment protection legislation. We show that if the output from the match is uncertain ex ante, there may exist a discriminatory equilibrium where workers with the same productive characteristics are subject to different hiring standards. If a bad match takes place, discriminated workers will use longer time to find another job, prolonging the costly period for the firm. This makes it less profitable for the firms to hire the discriminated workers, thus sustaining discrimination. In contrast to standard models, the existence of employers with a taste for discrimination may make it more profitable to discriminate also for firms without discriminatory preferences.

Suggested Citation

  • Holden, Steinar & Rosén, Åsa, 2009. "Discrimination and Employment Protection," Memorandum 22/2009, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2009_022
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    References listed on IDEAS

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    Cited by:

    1. Deschamps, Pierre & De Sousa, José, 2021. "Labor mobility and racial discrimination," European Economic Review, Elsevier, vol. 135(C).
    2. Bruno Decreuse & Linas Tarasonis, 2016. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Working Papers halshs-01327961, HAL.
    3. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2012. "Immigrant wage profiles within and between establishments," Labour Economics, Elsevier, vol. 19(4), pages 541-556.
    4. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.
    5. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2017. "Talent, Career Choice and Competition: The Gender Wage Gap at the Top," Working Paper Series 1169, Research Institute of Industrial Economics, revised 06 Mar 2023.
    6. repec:hal:spmain:info:hdl:2441/6ftmcu468j8a49bft2hrpi6uql is not listed on IDEAS
    7. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    8. Emiko Usui, 2015. "Occupational gender segregation in an equilibrium search model," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-14, December.
    9. Lagerlöf, Johan N.M., 2020. "Strategic gains from discrimination," European Economic Review, Elsevier, vol. 122(C).
    10. Basu,Kaushik, 2015. "Discrimination as a coordination device : markets and the emergence of identity," Policy Research Working Paper Series 7490, The World Bank.
    11. Johan N. M. Lagerlöf, 2016. "Strategic Gains from Labor Market Discrimination," Discussion Papers 16-03, University of Copenhagen. Department of Economics.
    12. Persson, Lars & Heyman, Fredrik & Norbäck, Pehr-Johan, 2018. "Gender Wage Gap at the Top, Job Inflexibility and Product Market Competition," CEPR Discussion Papers 13075, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Discrimination; Employment Protection; Hiring Standards;
    All these keywords.

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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