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A General Equilibrium Model of Discrimination and Its Effects on Incomes

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  • Tzannatos, Zafiris

Abstract

A general-equilibrium model is utilized to examine the effects upon factor incomes of the narrowing of an arbitrary wage differential between two groups of workers. The empirical section draws upon the recent experience of female workers in Britain after the introduction of the Equal Pay Act. The results suggest that profits are more likely to decrease when arbitrary wage differentials narrow, and this conclusion casts doubt whether many of the neoclassical theories of discrimination are relevant to the empirical study of discrimination. Copyright 1987 by Scottish Economic Society.

Suggested Citation

  • Tzannatos, Zafiris, 1987. "A General Equilibrium Model of Discrimination and Its Effects on Incomes," Scottish Journal of Political Economy, Scottish Economic Society, vol. 34(1), pages 19-36, February.
    • Handle: RePEc:bla:scotjp:v:34:y:1987:i:1:p:19-36
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    Cited by:

    1. S. Madheswaran & Smrutirekha Singhari, 2016. "Social exclusion and caste discrimination in public and private sectors in India: A decomposition analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 59(2), pages 175-201, June.
    2. Pudney, Stephen & Shields, Michael A., 1999. "Gender and Racial Discrimination in Pay and Promotion for NHS Nurses," IZA Discussion Papers 85, Institute of Labor Economics (IZA).

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