Job Matching and Affirmative Action: The Impact of Transfer Policies

Cyril Rouault

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Abstract: Subsidies and taxes are commonly used tools in labor markets to influence employment outcomes. This paper examines job matching within a Kelso-Crawford framework to assess the effects of these transfers on workers' welfare. We show that affirmative action policies, while well-intentioned, may inadvertently reduce the welfare of minority workers. To mitigate this, we identify transfer policies that do not negatively impact a group. A transfer negatively impacts a group if it reduces the utility of at least one member after implementation. Furthermore, we explore various objectives of affirmative action policies, such as increasing minority representation in firms, raising wages, and reducing unemployment among minority workers. For each objective, we propose transfer policies that do not negatively impact minority workers.

Keywords: Job matching; Transfer policy; Market equilibrium; Subsidy; Taxation; Affirmative-Action; Salary (search for similar items in EconPapers)
Date: 2024-10-24
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