Search, Bargaining and Employer Discrimination

Åsa Rosén

Working Papers from Uppsala - Working Paper Series

Abstract: This paper analyses Becker's (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. It is shown that the highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and control are separated, both highest profits and highest utility may be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry and/or takeovers do not ensure that wage differentials due to employer discrimination will disappear.

Keywords: BARGAINING; DISCRIMINATION (search for similar items in EconPapers)
JEL-codes: J71 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1998
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Citations: View citations in EconPapers (1)

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Working Paper: Search, Bargaining and Employer Discrimination (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:uppaal:1998-13

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