A Model and Some Evidence Concerning the Influence of Discrimination on Wages

Cotton M Lindsay and Michael Maloney

Economic Inquiry, 1988, vol. 26, issue 4, 645-60

Abstract: The observed wage gap between men and women is widely attributed to discrimination in the workplace. Yet, in the standard neoclassical framework, discrimination is neither a necessary nor sufficient condition. This paper presents a modified neoclassical model that supports equilibrium wage differentials and that has testable implications. The paper also surmounts a difficulty that has plagued many earlier assessments--separating prejudice from other explanations of the wage gap. By directing attention away from wages to other implied effects of discrimination, the model offers cleaner tests of the impact of prejudice in labor markets. Results of such tests are reported. Copyright 1988 by Oxford University Press.

Date: 1988
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