A characterization of "Phelpsian" statistical discrimination

Christopher Chambers and Federico Echenique

Papers from arXiv.org

Abstract: We establish that statistical discrimination is possible if and only if it is impossible to uniquely identify the signal structure observed by an employer from a realized empirical distribution of skills. The impossibility of statistical discrimination is shown to be equivalent to the existence of a fair, skill-dependent, remuneration for workers. Finally, we connect the statistical discrimination literature to Bayesian persuasion, establishing that if discrimination is absent, then the optimal signaling problem results in a linear payoff function (as well as a kind of converse).

Date: 2018-08
New Economics Papers: this item is included in nep-mic
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http://arxiv.org/pdf/1808.01351 Latest version (application/pdf)

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Journal Article: A Characterisation of ‘Phelpsian’ Statistical Discrimination (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1808.01351

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