Journal article

A Short Note on Discrimination and Favoritism in the Labor Market

N SALAMANCA ACOSTA, J Feld

The B.E. Journal of Theoretical Economics | De Gruyter | Published : 2017

Abstract

We extend Becker’s model of discrimination by allowing firms to have discriminatory and favoring preferences simultaneously. We draw the two-preference parallel for the marginal firm, illustrate the implications for wage differentials, and consider the implied long-run equilibrium. In the short-run, wage differentials depend on relative preferences. However, in the long-run, market forces drive out discriminatory but not favoring firms.

Grants

Awarded by Australian Research Council Centre of Excellence for Children and Families over the Life Course


Funding Acknowledgements

Australian Research Council Centre of Excellence for Children and Families over the Life Course (Grant/Award Number: CE140100027).