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Discrimination in an Equilibrium Search Model

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  • Black, Dan A

Abstract

The author constructs an equilibrium search model where some employers have a distaste for hiring minority workers and shows that this bias results in economic discrimination against minority workers. Although only unprejudiced firms hire minority workers, minority workers receive lower wages than workers not facing discrimination whenever any employers in the market have a distaste for minority workers. One implication of the model is that gender or racial wage differentials understate the utility loss from discrimination. In addition, the wages of minority workers increase when their proportion increases in the labor market. Copyright 1995 by University of Chicago Press.

Suggested Citation

  • Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
  • Handle: RePEc:ucp:jlabec:v:13:y:1995:i:2:p:309-33
    DOI: 10.1086/298376
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    References listed on IDEAS

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    1. Albrecht, James W & Jovanovic, Boyan, 1986. "The Efficiency of Search under Competition and Monopsony," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1246-1257, December.
    2. Arnott, Richard J & Stiglitz, Joseph E, 1985. "Labor Turnover, Wage Structures, and Moral Hazard: The Inefficiency of Competitive Markets," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 434-462, October.
    3. Harry J. Holzer, 1986. "Reservation Wages and Their Labor Market Effects for Black and White Male Youth," Journal of Human Resources, University of Wisconsin Press, vol. 21(2), pages 157-177.
    4. Lorne Carmichael, 1983. "Firm-Specific Human Capital and Promotion Ladders," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 251-258, Spring.
    5. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
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