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Statistical Discrimination and the Distribution of Wages

Author

Listed:
  • Prashant Bharadwaj
  • Rahul Deb
  • Ludovic Renou

Abstract

We characterize the conditions under which the wage distributions for two groups are consistent with a general model of statistical discrimination. We adapt this theoretical characterization to develop a novel empirical test, the rejection of which we interpret as evidence of taste-based discrimination. In doing so, we provide a theoretical foundation via which the wage structure effect in the decomposition of wage distributions can be interpreted as evidence of taste-based discrimination. We provide a proof of concept application using Census and NLSY-79 data, which suggests taste-based discrimination at work against Black male workers in several broad occupation categories.

Suggested Citation

  • Prashant Bharadwaj & Rahul Deb & Ludovic Renou, 2024. "Statistical Discrimination and the Distribution of Wages," NBER Working Papers 32562, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32562
    Note: LS
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    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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