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Labour Market Performance Effects of Discrimination and Loss of Skill

Author

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  • Larsen, Birthe

    (Department of Economics, Copenhagen Business School)

  • Waisman, Gisela

    (Stockholm University)

Abstract

We examine the impact of discrimination on labour market performance when workers are subject to a risk of losing skills during the experience of unemployment. Within a search and matching model, we show that all natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment increases in the other sector. Discrimination may induce immigrants to train more or less than natives, depending on the sector where it is present. Welfare tends to be most negatively affected by discrimination among high- productivity workers.

Suggested Citation

  • Larsen, Birthe & Waisman, Gisela, 2012. "Labour Market Performance Effects of Discrimination and Loss of Skill," Working Papers 05-2012, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2012_005
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    Cited by:

    1. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
    2. Gisela Waisman & Birthe Larsen, 2016. "Income, amenities and negative attitudes," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-32, December.
    3. Larisa Stanila & Maria Denisa Vasilescu & Eva Militaru, 2020. "Investigating Labor Market Discrimination in Romania," Sustainability, MDPI, vol. 12(12), pages 1-19, June.

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    More about this item

    Keywords

    discrimination; unemployment; search and matching; wages;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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