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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
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  8. 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.
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