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Discrimination and Worker Evaluation

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  • Costas Cavounidis
  • Kevin Lang

Abstract

We develop a model of self-sustaining discrimination in wages, coupled with higher unemployment and shorter employment duration among blacks. While white workers are hired and retained indefinitely without monitoring, black workers are monitored and fired if a negative signal is received. The fired workers, who return to the pool of job-seekers, lower the average productivity of black job-seekers, perpetuating the cycle of lower wages and discriminatory monitoring. Under suitable parameter values the model has two steady states, one corresponding to each population group. Discrimination can persist even if the productivity of blacks exceeds that of whites.

Suggested Citation

  • Costas Cavounidis & Kevin Lang, 2015. "Discrimination and Worker Evaluation," NBER Working Papers 21612, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21612
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    References listed on IDEAS

    as
    1. Kevin Lang, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 363-382.
    2. David Bjerk, 2008. "Glass Ceilings or Sticky Floors? Statistical Discrimination in a Dynamic Model of Hiring and Promotion," Economic Journal, Royal Economic Society, vol. 118(530), pages 961-982, July.
    3. Rosen, Asa, 1997. "An equilibrium search-matching model of discrimination," European Economic Review, Elsevier, vol. 41(8), pages 1589-1613, August.
    4. Bronars, Stephen G & Famulari, Melissa, 1997. "Wage, Tenure, and Wage Growth Variation within and across Establishment," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 285-317, April.
    5. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    6. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-347, June.
    7. Fryer, Roland Jr., 2007. "Belief flipping in a dynamic model of statistical discrimination," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1151-1166, June.
    8. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    9. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, September.
    10. Monks, James, 2000. "The returns to individual and college characteristics: Evidence from the National Longitudinal Survey of Youth," Economics of Education Review, Elsevier, vol. 19(3), pages 279-289, June.
    11. Kevin Lang & Michael Manove, 2011. "Education and Labor Market Discrimination," American Economic Review, American Economic Association, vol. 101(4), pages 1467-1496, June.
    12. Robert W. Fairlie & William A. Sundstrom, 1999. "The Emergence, Persistence, and Recent Widening of the Racial Unemployment Gap," ILR Review, Cornell University, ILR School, vol. 52(2), pages 252-270, January.
    13. David H. Autor & David Scarborough, 2008. "Does Job Testing Harm Minority Workers? Evidence from Retail Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 219-277.
    14. Fryer, Roland, 2007. "Belief Flipping in a Dynamic Model of Statistical Discrimination," Scholarly Articles 2955768, Harvard University Department of Economics.
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    Cited by:

    1. 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.
    2. 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.
    3. Dewan, Torun & Wolton, Stephane, 2019. "A Political Economy of Social Discrimination," MPRA Paper 94394, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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