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Search, Bargaining and Employer Discrimination

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  • Rosén, Åsa

    (SOFI)

Abstract

This paper analyses Becker´s (1971) theory of employer discrimination within a search and wage-bargaining setting. Discriminatory firms pay workers who are discriminated against less, and apply stricter hiring-criteria to these workers. It is shown that the highest profits are realized by firms with a positive discrimination coefficient. Moreover, once ownership and control are separated, both highest profits and highest utility may be realized by firms with a positive discrimination coefficient. Thus, market forces, like entry and/or takeovers do not ensure that wage differentials due to employer discrimination will disappear.

Suggested Citation

  • Rosén, Åsa, 1998. "Search, Bargaining and Employer Discrimination," Working Paper Series 1998:13, Uppsala University, Department of Economics.
    • Handle: RePEc:hhs:uunewp:1998_013
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    References listed on IDEAS

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    More about this item

    Keywords

    Search; discrimination;

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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