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Search, Bargaining and Employer Discrimination

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  • Rosén, Åsa

    () (SOFI)

Abstract

This paper analyses Becker´s (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. It is shown that the highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and control are separated, both highest profits and highest utility may be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry and/or takeovers do not ensure that wage differentials due to employer discrimination will disappear.

Suggested Citation

  • Rosén, Åsa, 1998. "Search, Bargaining and Employer Discrimination," Working Paper Series 1998:13, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:1998_013
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    References listed on IDEAS

    as
    1. Audra J. Bowlus & Zvi Eckstein, 2002. "Discrimination and Skill Differences in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1309-1345, November.
    2. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
    3. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
    4. Pissarides, C A, 1984. "Efficient Job Rejection," Economic Journal, Royal Economic Society, vol. 94(376a), pages 97-108, Supplemen.
    5. Sasaki, Masaru, 1999. "An Equilibrium Search Model with Coworker Discrimination," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 377-407, April.
    6. Joni Hersch, 1991. "Equal Employment Opportunity Law and Firm Profitability," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 139-153.
    7. Rosen, Asa, 1997. "An equilibrium search-matching model of discrimination," European Economic Review, Elsevier, vol. 41(8), pages 1589-1613, August.
    8. Sattinger, Michael, 1996. "Search and discrimination," Labour Economics, Elsevier, vol. 3(2), pages 143-167, September.
    9. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    10. 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.
    11. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
    12. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
    13. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
    14. Barry T. Hirsch & Edward J. Schumacher, 1992. "Labor Earnings, Discrimination, and the Racial Composition of Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 602-628.
    15. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
    16. 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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    More about this item

    Keywords

    Search; discrimination;

    JEL classification:

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

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