Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts

Zheng Fang and Christos Sakellariou

Annals of Economics and Finance, 2013, vol. 14, issue 2, 451-480

Abstract: This paper extends Burdett and Coles (2003)'s search model to two types of workers and firms and derives the equilibrium earnings distributions for both types of workers. It is proven that minority workers have a higher unemployment rate than majority workers; discriminating firms make lower profit than non-discriminating firms; offers to minority workers by non-discriminating firms are consistently superior to those by discriminating firms, and at the same wage level, majority workers almost always experience a faster wage increase than the minority workers.

Keywords: Discrimination; Search model; Wage-tenure contract (search for similar items in EconPapers)
JEL-codes: J31 J41 J71 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts (2010)
Working Paper: Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2013:v:14:i:2:fang:sakellariou

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