Discrimination and Employment Protection

Steinar Holden and Asa Rosen

No 2822, CESifo Working Paper Series from CESifo

Abstract: We study a search model with employment protection legislation. We show that if the output from the match is uncertain ex ante, there may exist a discriminatory equilibrium where workers with the same productive characteristics are subject to different hiring standards. If a bad match takes place, discriminated workers will use longer time to find another job, prolonging the costly period for the firm. This makes it less profitable for the firms to hire the discriminated workers, thus sustaining discrimination. In contrast to standard models, the existence of employers with a taste for discrimination may make it more profitable to discriminate also for firms without discriminatory preferences.

Keywords: discrimination; employment protection; hiring standards (search for similar items in EconPapers)
JEL-codes: J60 J70 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: DISCRIMINATION AND EMPLOYMENT PROTECTION (2014)
Working Paper: Discrimination and Employment Protection (2009)
Working Paper: Discrimination and Employment Protection (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2822

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