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Competition and Discrimination: a not so Obvious Relationship

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Abstract

Discrimination models have diffivulties to study discrimination without assuming that prejudiced firms are more productive and results lead to workers' segregation. In this article, the model uses oligopsony and heterogeneity of workers' preferences to obtain a persistent discrimination. Firms hire both thpes of workers and pay a lower wage to the workers discriminated against whatever their taste for discrimination. A single prejudiced firm leads to a substancial wage gap in all firms. Consequently, the existence of discrimination allows a non-zero profit for unprejudiced firms and they have also no incentives to push out prejudiced firms. Moreover, the wage gap is affected by firms' spread out as well as by the number of prejudiced firms in the market. Government policies decrease the impact of taste for discrimination on wages but governments are not interested in

Suggested Citation

  • Clémence Berson, 2011. "Competition and Discrimination: a not so Obvious Relationship," Documents de travail du Centre d'Economie de la Sorbonne 11005, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:11005
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    File URL: http://mse.univ-paris1.fr/pub/mse/CES2011/11005.pdf
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    Cited by:

    1. Diego GentilePassaro & Fuhito Kojima & Bobak Pakzad-Hurson, 2023. "Equal Pay for Similar Work," Papers 2306.17111, arXiv.org, revised Sep 2025.
    2. Yasuda, Hiroki, 2023. "Employers’ stereotypes and taste-based discrimination," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    3. Agnieszka Malkowska & Anna Tokarz-Kocik & Karolina Drela & Anna Bera, 2022. "Employee Financial Wellness Programs (EFWPs) as an Innovation in Incentive Systems of Energy Sector Enterprises in Poland during the COVID-19 Pandemic—Current Status and Development Prospects," Energies, MDPI, vol. 15(6), pages 1-18, March.
    4. Anna D’Ambrosio & Roberto Leombruni & Tiziano Razzolini, 2025. "Does far-right populism affect immigrants’ working conditions?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 38(1), pages 1-31, March.
    5. Dodini, Samuel, 2023. "The spillover effects of labor regulations on the structure of earnings and employment: Evidence from occupational licensing," Journal of Public Economics, Elsevier, vol. 225(C).
    6. Héctor Alberto Botello-Peñaloza, 2021. "Wage Inequality of Venezuelan Migrants in Ecuador," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 115-132, March.
    7. Hamed Pirpour, 2022. "Measuring Taste-Based Employment Discrimination Between Females and Males," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(3), pages 729-745, September.
    8. Pu‐yan Nie & Yong‐cong Yang, 2023. "Innovation and competition with human capital input," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1779-1785, April.

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    Keywords

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    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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