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A monopsonistic approach to disability discrimination and non-discrimination

Author

Listed:
  • Eirini-Christina Saloniki

    () (Academic Unit of Health Economics, University of Leeds)

Abstract

We use a simple model of monopsony to explain wage differences between the non-work-limited disabled and non-disabled. In this model, employers exploit the non-work-limited disabled workers and potential workers by offering them lower wages to increase profits, knowing that they face high search costs. We propose an extension of this model to account for the case where firms are not allowed, by law, to treat disabled and non-disabled differently. We show that non-discrimination improves the wage distribution for the non-work-limited disabled workers but worsens it for the non-disabled.

Suggested Citation

  • Eirini-Christina Saloniki, 2015. "A monopsonistic approach to disability discrimination and non-discrimination," Economics Bulletin, AccessEcon, vol. 35(4), pages 2064-2073.
  • Handle: RePEc:ebl:ecbull:eb-15-00459
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I4-P211.pdf
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    References listed on IDEAS

    as
    1. Marjorie L. Baldwin & William G. Johnson, 2000. "Labor Market Discrimination Against Men with Disabilities in the Year of the ADA," Southern Economic Journal, Southern Economic Association, vol. 66(3), pages 548-566, January.
    2. Thomas DeLeire, 2001. "Changes in Wage Discrimination against People with Disabilities: 1984-93," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 144-158.
    3. Barth, Erling & Dale-Olsen, Harald, 2009. "Monopsonistic discrimination, worker turnover, and the gender wage gap," Labour Economics, Elsevier, vol. 16(5), pages 589-597, October.
    4. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, November.
    5. Michael R Ransom & Ronald L. Oaxaca, 2010. "New Market Power Models and Sex Differences in Pay," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 267-289, April.
    6. William G. Johnson & James Lambrinos, 1985. "Wage Discrimination against Handicapped Men and Women," Journal of Human Resources, University of Wisconsin Press, vol. 20(2), pages 264-277.
    7. Giovanni Sulis, 2011. "What can monopsony explain of the gender wage differential in Italy?," International Journal of Manpower, Emerald Group Publishing, vol. 32(4), pages 446-470, July.
    8. Miguel Á. MALO & Ricardo PAGÁN, 2012. "Wage differentials and disability across Europe: Discrimination and/or lower productivity?," International Labour Review, International Labour Organization, vol. 151(1-2), pages 43-60, June.
    9. Marjorie L. Baldwin & Edward J. Schumacher, "undated". "Job Mobility among Workers with Disabilities," Working Papers 9805, East Carolina University, Department of Economics.
    10. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    11. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2010. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 291-330, April.
    12. Melanie Jones & Paul Latreille, 2011. "Disability and self-employment: evidence for the UK," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4161-4178.
    13. Melanie Jones, 2009. "Disability, employment and earnings: an examination of heterogeneity," Applied Economics, Taylor & Francis Journals, vol. 43(8), pages 1001-1017.
    14. Marjorie Baldwin & William G. Johnson, 1994. "Labor Market Discrimination against Men with Disabilities," Journal of Human Resources, University of Wisconsin Press, vol. 29(1), pages 1-19.
    15. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
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    More about this item

    Keywords

    disability; discrimination; monopsony; wages;

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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