Local labor markets and taste-based discrimination
Clémence Berson ()
IZA Journal of Labor Economics, 2016, vol. 5, issue 1, 1-21
Abstract This article appeals to heterogeneity in workers’ non-wage preferences to model taste-based discrimination. Firms hire both types of workers and pay lower wages to minority workers, whatever their taste for discrimination. A single prejudiced firm in the market produces a substantial wage gap in all firms. Consequently, discrimination allows unprejudiced firms to make non-zero profits, so that they have little incentive to drive out prejudiced firms. As the market does not eliminate discrimination, state intervention is required. Indirect policies do not affect the absolute wage gap between the two groups, but may be more likely to be used than direct policies.
Keywords: Discrimination; Oligopsony; Wage gap (search for similar items in EconPapers)
JEL-codes: J42 J71 L13 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1186/s40172-016-0045-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:izalbr:v:5:y:2016:i:1:d:10.1186_s40172-016-0045-9
Ordering information: This journal article can be ordered from
Access Statistics for this article
IZA Journal of Labor Economics is currently edited by Joni Hersch and Pierre Cahuc
More articles in IZA Journal of Labor Economics from Springer, Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Bibliographic data for series maintained by Sonal Shukla ().