IDEAS home Printed from https://ideas.repec.org/a/eee/soceco/v38y2009i3p456-463.html
   My bibliography  Save this article

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

Author

Listed:
  • Jacques, Jean-François
  • Walkowiak, Emmanuelle

Abstract

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.

Suggested Citation

  • Jacques, Jean-François & Walkowiak, Emmanuelle, 2009. "Low wages and high unemployment rates: The role of social interactions in hiring discrimination," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 456-463, June.
  • Handle: RePEc:eee:soceco:v:38:y:2009:i:3:p:456-463
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/B6W5H-4VB5K23-1/2/005c72f36b904487a54126692e1651dc
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Kremer, M & Maskin, E, 1996. "Wage Inequality and Segregation by Skill," Working papers 96-23, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
    4. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, Febrero.
    5. Saint-Paul, Gilles, 1996. "Are the unemployed unemployable?," European Economic Review, Elsevier, vol. 40(7), pages 1501-1519, August.
    6. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    7. Claudia Goldin, 2014. "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. Nathalie Greenan & Emmanuelle Walkowiak, 2005. "Informatique, organisation du travail et interactions sociales," Économie et Statistique, Programme National Persée, vol. 387(1), pages 35-63.
    9. Roland G. Fryer & Matthew O. Jackson, 2002. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," Microeconomics 0211002, University Library of Munich, Germany.
    10. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    11. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
    12. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    13. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    14. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
    15. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Frijters & Michael A. Shields & Stephen Wheatley Price & Nikolaos Theodoropoulos, 2006. "Testing for Employee Discrimination in Britain using Matched Employer-Employee Data," University of Cyprus Working Papers in Economics 8-2006, University of Cyprus Department of Economics.
    2. Paul Frijters, 2003. "Testing for Employee Discrimination using Matched Employer-Employee Data: Theory and Evidence," Paul Frijters Discussion Papers 2003-1, School of Economics and Finance, Queensland University of Technology.
    3. Kahanec, Martin, 2006. "Ethnic Specialization and Earnings Inequality: Why Being a Minority Hurts but Being a Big Minority Hurts More," IZA Discussion Papers 2050, Institute of Labor Economics (IZA).
    4. Luis Garicano & Thomas N. Hubbard, 2016. "The Returns to Knowledge Hierarchies," Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(4), pages 653-684.
    5. Josef Falkinger & Volker Grossmann, 2003. "Workplaces in the Primary Economy and Wage Pressure in the Secondary Labor Market," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(3), pages 523-544, September.
    6. Luojia Hu & Christopher Taber, 2011. "Displacement, Asymmetric Information, and HeterogeneousHuman Capital," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 113-152, January.
    7. Nathalie Greenan & Emmanuelle Walkowiak, 2005. "Informatique, organisation du travail et interactions sociales," Économie et Statistique, Programme National Persée, vol. 387(1), pages 35-63.
    8. Maarten Vendrik & Christiane Schwieren, 2010. "Identification, screening and stereotyping in labour market discrimination," Journal of Economics, Springer, vol. 99(2), pages 141-171, March.
    9. Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, August.
    10. Gautier, Pieter A. & Zenou, Yves, 2010. "Car ownership and the labor market of ethnic minorities," Journal of Urban Economics, Elsevier, vol. 67(3), pages 392-403, May.
    11. Mohanty, Smrutirekha, 2021. "A distributional analysis of the gender wage gap among technical degree and diploma holders in urban India," International Journal of Educational Development, Elsevier, vol. 80(C).
    12. Dueñas, Diego & Iglesias, Carlos & Llorente, Raquel, 2016. "¿Por qué las mujeres no se distribuyen de forma homogénea en el mercado de trabajo español? El “efecto rechazo” y el “efecto atracción”," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(330), pages .339-369, abril-jun.
    13. David Neumark & Wendy A. Stock, 2001. "The Effects of Race and Sex Discrimination Laws," NBER Working Papers 8215, National Bureau of Economic Research, Inc.
    14. Jean-Louis Arcand & Béatrice D'hombres, 2004. "Racial discrimination in the Brazilian labour market: wage, employment and segregation effects," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(8), pages 1053-1066.
    15. Levitt, Steven D, 2004. "Testing Theories of Discrimination: Evidence from Weakest Link," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 431-452, October.
    16. Lagerlöf, Johan N.M., 2020. "Strategic gains from discrimination," European Economic Review, Elsevier, vol. 122(C).
    17. Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 247-285, April.
    18. Balsa, Ana I. & McGuire, Thomas G., 2001. "Statistical discrimination in health care," Journal of Health Economics, Elsevier, vol. 20(6), pages 881-907, November.
    19. Luojia Hu & Christopher Taber, 2005. "Layoffs, Lemons, Race, and Gender," NBER Working Papers 11481, National Bureau of Economic Research, Inc.
    20. Barr & Oduro, Abena, 2000. "Ethnicity and wage determination in Ghana," Policy Research Working Paper Series 2506, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceco:v:38:y:2009:i:3:p:456-463. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/620175 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620175 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.