Market Power and Employment Discrimination
A theoretical model is developed which yields the prediction that firms in more highly concentrated industries will be more likely to practice employment discrimination than other firms. The model is tested for both race and sex discrimination. The results generally confirm that firms in more highly concentrated industries discriminate more. The evidence suggests that firms which discriminate on the basis of race also do so on the basis of sex. The implications of equal-work-equal-pay legislation for employment discrimination are investigated, and we find that there may be a trade-off between employment discrimination and equalization of wages.
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