A Short Note on Discrimination and Favoritism in the Labor Market
Nicolas Salamanca () and
Jan Feld ()
No 10291, IZA Discussion Papers from Institute of Labor Economics (IZA)
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: J70 J31 (search for similar items in EconPapers)
Pages: 12 pages
New Economics Papers: this item is included in nep-bec and nep-mic
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Published in: BE Journal of Theoretical Economics, 2017, 17(1)
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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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