Identification, Screening and Stereotyping in Labour Market Discrimination

Maarten Vendrik and Christiane Schwieren

No 4571, IZA Discussion Papers from IZA Network @ LISER

Abstract: According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup. We integrate both responses in a microeconomic model of hiring and pay decisions by an employer. Increasing competition in the product market makes the employer feel more uncertain about his profits, but also raises the opportunity cost of screening expenditures. This elicits substitution of ingroup identification for screening expenditures, and hence enhances discrimination.

Keywords: social identity; stereotyping; discrimination; uncertainty; screening (search for similar items in EconPapers)
JEL-codes: J7 M51 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2009-11
New Economics Papers: this item is included in nep-mic
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Published - published in Journal of Economics, 2010, 99 (2), 141-171

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Related works:
Journal Article: Identification, screening and stereotyping in labour market discrimination (2010)
Working Paper: Identification, screening and stereotyping in labor market discrimination (2005)
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