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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)

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: J70 J31 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2016-10
New Economics Papers: this item is included in nep-bec and nep-mic
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Citations: View citations in EconPapers (4) Track citations by RSS feed

Published in: BE Journal of Theoretical Economics, 2017, 17(1)

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Related works:
Journal Article: A Short Note on Discrimination and Favoritism in the Labor Market (2017) Downloads
Working Paper: A Short Note on Discrimination and Favoritism in the Labor Market (2016) Downloads
Working Paper: A short note on discrimination and favoritism in the labor market (2016) Downloads
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