Search, Bargaining, and Employer Discrimination

Åsa Rosén

Journal of Labor Economics, 2003, vol. 21, issue 4, 807-830

Abstract: This article analyzes Becker's ([1957] 1971) theory of employer discrimination within a search and wage-bargaining setting. Discriminatory firms pay workers who are discriminated against less and apply stricter hiring criteria to these workers. The highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and management are separated, both highest profits and highest utility can be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry or takeovers, do not ensure that wage differentials due to employer discrimination disappear.

Date: 2003
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Related works:
Working Paper: Search, Bargaining and Employer Discrimination (1998)
Working Paper: Search, Bargaining and Employer Discrimination (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlabec:v:21:y:2003:i:4:p:807-830

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