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Identification, Screening and Stereotyping in Labour Market Discrimination

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  • Vendrik, Maarten C.M.

    (Maastricht University)

  • Schwieren, Christiane

    (Heidelberg University)

Abstract

According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup. We integrate both responses in a microeconomic model of hiring and pay decisions by an employer. Increasing competition in the product market makes the employer feel more uncertain about his profits, but also raises the opportunity cost of screening expenditures. This elicits substitution of ingroup identification for screening expenditures, and hence enhances discrimination.

Suggested Citation

  • Vendrik, Maarten C.M. & Schwieren, Christiane, 2009. "Identification, Screening and Stereotyping in Labour Market Discrimination," IZA Discussion Papers 4571, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4571
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    Cited by:

    1. Giacomo Corneo, 2010. "Nationalism, cognitive ability, and interpersonal relations," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(2), pages 119-141, June.
    2. Edis, Emrah B. & Oguz, Ceyda & Ozkarahan, Irem, 2013. "Parallel machine scheduling with additional resources: Notation, classification, models and solution methods," European Journal of Operational Research, Elsevier, vol. 230(3), pages 449-463.
    3. Martin Carree & Marcus Dejardin, 2007. "‘Entry Thresholds and Actual Entry and Exit in Local Markets’," Small Business Economics, Springer, vol. 29(1), pages 203-212, June.
    4. Minas Vlassis & Nick Drydakis, 2012. "Wage discrimination and antidiscrimination policy in unionized industries," Journal of Economics, Springer, vol. 105(1), pages 45-62, January.

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    More about this item

    Keywords

    social identity; stereotyping; discrimination; uncertainty; screening;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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