Evolution, Green Beards, And Skin Hue Wage Discrimination

This paper provides an evolutionary rationale for both interracial and intraracial wage differentials by examining the implications of white employers mediating their employer-employee relationships on the basis of genetic similarity. If in organized labor markets, relationships mediated through genetic similarity are optimal in terms of Darwinian Fitness, a fundamental evolutionary implication is that the Marginal Rate of Substitution (MRS) in Darwinian fitness, holding extended fitness constant, equals the MRS ins preferernces, holding utility constant. Given such an evolutionary equilibrium, results are derived showing that the strength of tastes for discrimination depends upon the skin hus of nonwhite workers. The rationale established for racial wage differentials is that where skin hue serves to indicate genetic similarity between employer and employee, wage differentials emerge that are a function of skin hue.