Labour market discrimination as an agency cost

Pierre-Guillaume Méon and Ariane Szafarz

No 08-019.RS, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: This paper studies labour market discriminations as an agency problem. It sets up a principal-agent model of a firm, where the manager is a taste discriminator and has to make unobservable hiring decisions that determine the shareholder’s profits because workers differ in skills. The paper shows that performance-based contracts may moderate the manager’s propensity to discriminate, but that it is unlikely to fully eliminate discrimination.

Keywords: discrimination; agency theory; hiring. (search for similar items in EconPapers)
JEL-codes: D21 J71 M12 M51 (search for similar items in EconPapers)
Pages: 26 p.
Date: 2008-06
New Economics Papers: this item is included in nep-bec, nep-cta and nep-lab
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Published by: Université Libre de Bruxelles, Solvay Business School, Centre Emile Bernheim (CEB)

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Related works:
Working Paper: Labor market discrimination as an agency cost (2008)
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