A Short Note on Discrimination and Favoritism in the Labor Market

Nicolas Salamanca and Jan Feld

The B.E. Journal of Theoretical Economics, 2017, vol. 17, issue 1, 10

Abstract: We extend Becker’s model of discrimination by allowing firms to have discriminatory and favoring preferences simultaneously. We draw the two-preference parallel for the marginal firm, illustrate the implications for wage differentials, and consider the implied long-run equilibrium. In the short-run, wage differentials depend on relative preferences. However, in the long-run, market forces drive out discriminatory but not favoring firms.

Keywords: wage gap; nepotism; firm preferences; long-run equilibrium (search for similar items in EconPapers)
JEL-codes: J31 J70 (search for similar items in EconPapers)
Date: 2017
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Working Paper: A Short Note on Discrimination and Favoritism in the Labor Market (2016)
Working Paper: A Short Note on Discrimination and Favoritism in the Labor Market (2016)
Working Paper: A short note on discrimination and favoritism in the labor market (2016)
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DOI: 10.1515/bejte-2016-0133

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