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Search, Bargaining, and Employer Discrimination

Author

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  • Asa Rosen

    (Swedish Institute for Social Research, Stockholm University)

Abstract

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.

Suggested Citation

  • Asa Rosen, 2003. "Search, Bargaining, and Employer Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 807-830, October.
  • Handle: RePEc:ucp:jlabec:v:21:y:2003:i:4:p:807-830
    DOI: 10.1086/377018
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    References listed on IDEAS

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    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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