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Low wages and high unemployment rates: The role of social interactions in hiring discrimination

  • Jacques, Jean-François
  • Walkowiak, Emmanuelle

The purpose of this paper is to explain why low-wage workers with identical qualifications to higher-wage workers are more exposed to unemployment. Each worker is considered to belong to a social group (defined according to his/her gender, age, and nationality). We assume that workers experience both productive interdependencies and social interactions within the firm. Also inter- and intra-group interactions determine worker productivity, and frictions on the labor market limit the hiring of the most productive workers. Consequently, externalities acting both within the firm and in the labor market can lead to a higher rate of unemployment for low-wage workers.

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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 38 (2009)
Issue (Month): 3 (June)
Pages: 456-463

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Handle: RePEc:eee:soceco:v:38:y:2009:i:3:p:456-463
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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  1. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2001. "The Economic Approach to Social Capital," Harvard Institute of Economic Research Working Papers 1916, Harvard - Institute of Economic Research.
  2. Nathalie Greenan & Emmanuelle Walkowiak, 2005. "Informatique, organisation du travail et interactions sociales," Économie et Statistique, Programme National Persée, vol. 387(1), pages 35-63.
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  7. Claudia Goldin, 2013. "A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings," NBER Chapters, in: Human Capital in History: The American Record, pages 313-348 National Bureau of Economic Research, Inc.
  8. Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
  9. Jackson, Matthew O. & Fryer Jr., Roland G., 2002. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," Working Papers 1144, California Institute of Technology, Division of the Humanities and Social Sciences.
  10. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc.
  11. Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers 98-18, Center for Economic Studies, U.S. Census Bureau.
  12. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
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  15. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
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