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Racial Discrimination in the Labor Market: Theory and Empirics

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  • Kevin Lang
  • Jee-Yeon K. Lehmann

Abstract

We review theories of race discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing model explains the unemployment rate differential. Models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment. At their current state of development, models of statistical discrimination based on rational stereotypes have little empirical content. It is plausible that models combining elements of the search models with statistical discrimination could fit the data. We suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17450.

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Date of creation: Sep 2011
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Handle: RePEc:nbr:nberwo:17450

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Citations

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Cited by:
  1. Fryer, Roland G. & Pager, Devah & Spenkuch, Jörg L., 2011. "Racial Disparities in Job Finding and Offered Wages," MPRA Paper 33607, University Library of Munich, Germany.
  2. Edo, Anthony & Jacquemet, Nicolas & Yannelis, Constantine, 2013. "Language Skills and Homophilous Hiring Discrimination: Evidence from Gender- and Racially-Differentiated Applications," CEPREMAP Working Papers (Docweb) 1313, CEPREMAP.
  3. David W. Johnston & Grace Lordan, 2014. "When Work Disappears: Racial Prejudice and Recession Labour Market Penalties," CEP Discussion Papers dp1257, Centre for Economic Performance, LSE.
  4. Erlend Berg & Maitreesh Ghatak & R Manjula & D Rajasekhar & Sanchari Roy, 2014. "Motivating knowledge agents: Can incentive pay overcome social distance?," The Centre for Market and Public Organisation 13/316, Department of Economics, University of Bristol, UK.
  5. Gavrilova, Evelina, 2013. "A Partner in Crime: Assortative Matching and Bias in the Crime Market," MPRA Paper 50432, University Library of Munich, Germany.
  6. Dequiedt, Vianney & Zenou, Yves, 2011. "International Migration, Imperfect Information, and Brain Drain," IZA Discussion Papers 5786, Institute for the Study of Labor (IZA).
  7. Jacques Poot & Bridget Daldy & Matthew Roskruge, 2013. "Perception of workplace discrimination among immigrants and native born New Zealanders," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(1), pages 137-154.
  8. Winters, John V. & Hirsch, Barry T., 2012. "An Anatomy of Racial and Ethnic Trends in Male Earnings," IZA Discussion Papers 6766, Institute for the Study of Labor (IZA).
  9. Lehmann, Jee-Yeon, 2011. "Job assignment and promotion under statistical discrimination: evidence from the early careers of lawyers," MPRA Paper 33466, University Library of Munich, Germany.
  10. Janssen, Simon & Tuor Sartore, Simone N. & Backes-Gellner, Uschi, 2014. "Social Attitudes on Gender Equality and Firms' Discriminatory Pay-Setting," IZA Discussion Papers 7959, Institute for the Study of Labor (IZA).
  11. Vojtech Bartos & Michal Bauer & Julie Chytilova & Filip Matejka, 2013. "Attention Discrimination: Theory and Field Experiments," CERGE-EI Working Papers wp499, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  12. Garcia, Gustavo Adolfo & Nicodemo, Catia, 2013. "Job Search Channels, Neighborhood Effects and Wages Inequality in Developing Countries: The Colombian Case," IZA Discussion Papers 7336, Institute for the Study of Labor (IZA).
  13. Akar, Gizem & Balkan, Binnur & Tumen, Semih, 2014. "Overview of Firm-Size and Gender Pay Gaps in Turkey: The Role of Informal Employment," MPRA Paper 53835, University Library of Munich, Germany.
  14. Mujcic, Redzo & Frijters, Paul, 2013. "Still Not Allowed on the Bus: It Matters If You're Black or White!," IZA Discussion Papers 7300, Institute for the Study of Labor (IZA).

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