Ahmed, Ali M. () (Centre for Labour Market Policy Research (CAFO))
Abstract
This paper presents a model where workers’beliefs and expectations about discrimination are significant. Identical firms announce vacancies and starting wages and workers apply to the firm. Workers are of two types, b and g, but identical in productivity. Firms do not prefer a particular type of worker over another. There is however a common belief among all workers that type b workers are discriminated against. This causes type b workers to avoid applying for jobs that offer wages perceived to be too high, since such workers believe that they don’t stand a chance against type g workers. In equilibrium some firms announce a job and high wages thereby attracting only type g workers, while others announce with low wages thereby attracting only type b workers.
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Publisher Info
Paper provided by Centre for Labour Market Policy Research (CAFO), School of Management and Economics, Växjö University in its series CAFO Working Papers with number
2006:10.
Find related papers by JEL classification: J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
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