Competition, Learning and Persistence in the Effects of Unmeritocratic Hiring Decisions
Sometimes wide disparities in workers' earnings are defended as simply the meritocratic outcome of a competitive process. While inequalities due to discrimination or luck are admitted as temporary possibilities, it is frequently argued that competition and the profit motive will eliminate them in the longer term. In the present paper, this position is challenged. A model is developed to demonstrate that hiring errors can have persistent effects on individual workers' earnings under conditions of capitalist competition. Hiring errors give the beneficiaries opportunities to learn and improve in their new jobs, raising the possibility that their initial advantages can become locked in. The model shows how fundamental features of the capitalist system (competition, the profit motive, the free labour exchange) can reinforce, and not always eliminate, these early advantages. While the emphasis is on random error, the same factors will play a comparable role in perpetuating the effects of discriminatory hiring decisions.
|Date of creation:||Apr 2006|
|Contact details of provider:|| Postal: Sydney, NSW 2006|
Phone: 61 +2 9351 5055
Fax: 61 +2 9351 4341
Web page: http://sydney.edu.au/arts/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Darity, William A, Jr & Williams, Rhonda M, 1985. "Peddlers Forever? Culture, Competition, and Discrimination," American Economic Review, American Economic Association, vol. 75(2), pages 256-61, May.
- A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
- Mason, Patrick L, 1999. "Male Interracial Wage Differentials: Competing Explanations," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 261-99, May.
- Mason, Patrick L, 1995. "Race, Competition and Differential Wages," Cambridge Journal of Economics, Oxford University Press, vol. 19(4), pages 545-67, August.
- W. Lee Hansen, 1967. "Introduction," Journal of Human Resources, University of Wisconsin Press, vol. 2(3), pages 291-292.
When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7657. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vanessa Holcombe)
If references are entirely missing, you can add them using this form.