"Endogenous Inequality in Integrated Labor Markets with Two-sided Search''
AbstractWe consider a market with "red" and "green" workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. There are also asymmetric equilibria in which firms search only for green workers, more green than red workers acquire skills, skilled green workers receive higher wages, and the unemployment rate is higher among skilled red workers. Discrimination between ex ante identical individuals arises in equilibrium, and yet firms have perfect information about their workers, and strictly prefer to hire minority workers.
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Bibliographic InfoPaper provided by University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences in its series CARESS Working Papres with number 98-06.
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Other versions of this item:
- Larry Samuelson & George J. Mailath & Avner Shaked, 2000. "Endogenous Inequality in Integrated Labor Markets with Two-Sided Search," American Economic Review, American Economic Association, vol. 90(1), pages 46-72, March.
- George J. Mailath & Larry Samuelson & Avner Shaked, . "Endogenous Inequality in Integrated Labor Markets with Two-sided Search," Penn CARESS Working Papers 90ff654ed11b714e3f7530c57, Penn Economics Department.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
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