A Theory Of Discrimination Based On Signalling And Strategic Information Acquisition
The paper develops a `signaling' based theory of discrimination where workers face different incentives for skill acquisition purely because of their group membership. Workers belonging to the disadvantaged group bear substantial signaling cost. The difference in signaling costs between groups is not due to any unexplained group heterogeneity but discriminatory information policy of the employer. Based on its belief about the group, an employer may not acquire relevant information about the workers of this group, even if such information were costless. It is shown that affirmative action policies can help in the presence of non-convex signaling technology. Factors like co-ordination amongst workers, presence of a 'dynamic' labor market and sub-group formation seem to affect the nature and degree of discrimination.
(This abstract was borrowed from another version of this item.)
|Date of creation:||1998|
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- Richard Startz & Lundberg, "undated". "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
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- Glenn C. Loury, 1998. "Discrimination in the Post-Civil Rights Era: Beyond Market Interactions," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 117-126, Spring. Full references (including those not matched with items on IDEAS)
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