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Search, Bargaining, and Employer Discrimination

  • Asa Rosen

    (Swedish Institute for Social Research, Stockholm University)

This article analyzes Becker's ([1957] 1971) theory of employer discrimination within a search and wage-bargaining setting. Discriminatory firms pay workers who are discriminated against less and apply stricter hiring criteria to these workers. The highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and management are separated, both highest profits and highest utility can be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry or takeovers, do not ensure that wage differentials due to employer discrimination disappear.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 21 (2003)
Issue (Month): 4 (October)
Pages: 807-830

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Handle: RePEc:ucp:jlabec:v:21:y:2003:i:4:p:807-830
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Masaru Sasaki, 1998. "An Equilibrium Search Model with Co-Worker Discrimination," Labor and Demography 9802001, EconWPA.
  2. Kennan, J. & Wilson, R., 1991. "Bargaining with Private Information," Working Papers 90-01rev, University of Iowa, Department of Economics.
  3. repec:dgr:uvatin:1998112 is not listed on IDEAS
  4. Bowlus, Audra J & Eckstein, Zvi, 1998. "Discrimination and Skill Differences in an Equilibrium Search Model," CEPR Discussion Papers 1859, C.E.P.R. Discussion Papers.
  5. George J. Borjas & Stephen G. Bronars, 1988. "Consumer Discrimination and Self-Employment," NBER Working Papers 2627, National Bureau of Economic Research, Inc.
  6. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-90, September.
  7. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1998. "Market Forces and Sex Discrimination," Labor and Demography 9807002, EconWPA.
  8. Erica L. Groshen, 1987. "The structure of the female/male wage differential: is it who you are, what you do, or where you work?," Working Paper 8708, Federal Reserve Bank of Cleveland.
  9. repec:dgr:uvatin:19980112 is not listed on IDEAS
  10. A Rosen, 1992. "An Equilibrium Search-Matching Model of Discrimination," CEP Discussion Papers dp0097, Centre for Economic Performance, LSE.
  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. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April.
  13. Pissarides, C A, 1984. "Efficient Job Rejection," Economic Journal, Royal Economic Society, vol. 94(376a), pages 97-108, Supplemen.
  14. Acemoglu, D., 1996. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," Working papers 96-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  15. Sattinger, Michael, 1996. "Search and discrimination," Labour Economics, Elsevier, vol. 3(2), pages 143-167, September.
  16. Joni Hersch, 1991. "Equal Employment Opportunity Law and Firm Profitability," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 139-153.
  17. repec:dgr:uvatin:2098112 is not listed on IDEAS
  18. James F. Ragan & Carol Horton Tremblay, 1988. "Testing for Employee Discrimination by Race and Sex," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 123-137.
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