A Short Note on Discrimination and Favoritism in the Labor Market

Nicolas Salamanca and Jan Feld

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: We extend Becker’s model of discrimination by allowing firms to have discriminatory and favoring preferences simultaneously. We draw the two-preference parallel for the marginal firm, illustrate the implications for wage differentials, and consider the implied long-run equilibrium. In the short-run, wage differentials depend on relative preferences. However, in the long-run, market forces drive out discriminatory but not favoring firms.

Keywords: Wage gap; nepotism; firm preferences; long-run equilibrium (search for similar items in EconPapers)
JEL-codes: J31 J70 (search for similar items in EconPapers)
Pages: 12pp
Date: 2016-08
New Economics Papers: this item is included in nep-bec and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2016n23.pdf (application/pdf)

Related works:
Journal Article: A Short Note on Discrimination and Favoritism in the Labor Market (2017)
Working Paper: A Short Note on Discrimination and Favoritism in the Labor Market (2016)
Working Paper: A short note on discrimination and favoritism in the labor market (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2016n23

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