Identification, screening and stereotyping in labour market discrimination
TL;DR: In this article, a microeconomic model of hiring and pay decisions by an employer is presented, where the authors integrate both responses in a model of uncertainty in decision-making, leading to less stereotyping of people and hence less discrimination, and social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup.
Abstract: According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup. We integrate both responses in a microeconomic model of hiring and pay decisions by an employer. Increasing competition in the product market makes the employer feel more uncertain about his profits, but also raises the opportunity cost of screening expenditures. This elicits substitution of ingroup identification for screening expenditures, and hence enhances discrimination.
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TL;DR: This paper argued that competition might be good for ethical behavior in the long run, because it promotes growth and raises incomes, and higher incomes raise the willingness to pay for ethical behaviour, but may also change what people believe to be ethical for the better.
Abstract: Explanations of unethical behavior often neglect the role of competition, as opposed to greed, in assuring its spread. Using the examples of child labor, corruption, excessive' executive pay, corporate earnings manipulation, and commercial activities by universities, this paper clarifies the role of competition in promoting censured conduct. When unethical behavior cuts costs, competition drives down prices and entrepreneurs' incomes, and thereby reduces their willingness to pay for ethical conduct. Nonetheless, I suggest that competition might be good for ethical behavior in the long run, because it promotes growth and raises incomes. Higher incomes raise the willingness to pay for ethical behavior, but may also change what people believe to be ethical for the better.
343 citations
TL;DR: In this article, the authors analyse the role of employers as "institutional" factors in the creation of segmentation in the labour market, focusing on the sectors of catering, cleaning and security as low-skilled service sector providers.
Abstract: Purpose – The purpose of this paper is to analyse the role of employers as “institutional” factors in the creation of segmentation in the labour market. Industrial structure defines segments of the labour market (the employer) based on the nature of demand, and with the impact on the individual workers or groups based on their personal characteristics.Design/methodology/approach – Empirical work is within the Dublin labour market, which experienced the largest increase in availability of migrant workers under immigration policies of the Celtic Tiger state. Focused on the sectors of catering, cleaning and security as low‐skilled service sector providers, the analysis is based on 24 semi‐structured interviews with employers selected based on a database of a cross‐section of all employers in the selected sectors in Dublin.Findings – Semi‐structured interviews reinforce state policies as key institutional factor underlying migrant labour trends and experiences, but perspectives of the employers in low‐end ser...
14 citations
TL;DR: The authors developed a model of how those judgments form based on a theory of symbolic values, which depicts the interaction between two values, one associated with an inherited ethnic trait (nationality) and one with an endogenous achievement trait (income) and found that individuals with lower cognitive ability are predicted to invest more value on nationalism and to have hostile relations with immigrants.
Abstract: Interpersonal relations are shaped by the judgements associated with the social categories that individuals perceive in their social contacts. I develop a model of how those judgments form based on a theory of symbolic values. The model depicts the interaction between two values, one associated with an inherited ethnic trait (“nationality”) and one with an endogenous achievement trait (“income”). Individuals with lower cognitive ability are predicted to invest more value on nationalism and to have hostile relations with immigrants. Multiple equilibria are possible, and better schooling may eliminate equilibria with xenophobia. Econometric findings based on data from three large surveys corroborate the predictions derived from the theoretical model.
14 citations
TL;DR: This article examined the effect of transitioning from welfare to full-time employment on a variety of measures of subjective well-being for a sample of long-term welfare recipients in British Columbia and New Brunswick who participated in the Self-Sufficiency Project (SSP).
Abstract: I examine the effect of transitioning from welfare to full‐time employment on a variety of measures of subjective well‐being for a sample of long‐term welfare recipients in British Columbia and New Brunswick who participated in the Self‐Sufficiency Project (SSP). Individuals randomly assigned to the treatment group could receive a generous time‐limited earnings supplement if they found full‐time work. I use random assignment to estimate the local average treatment effect of working full time on well‐being. For the complier subpopulation, I find large, positive effects on subjective well‐being that persist over the longer run for New Brunswick and through roughly three years for British Columbia. Policy changes made during the experiment may explain the provincial differences. De l’aide sociale au travail et bien‐etre subjectif : l’exemple d’un echantillon aleatoire et controle. Dans cet article, j’etudie les effets du passage de l’aide sociale au travail a temps plein sur un ensemble de mesures de bien‐etre subjectif au sein d’un panel d’allocataires sociaux de longue duree ayant participe au Projet d’autosuffisance (PAS) en Colombie‐Britannique et au Nouveau‐Brunswick. Les participants au projet, integres au groupe experimental de facon aleatoire, pouvaient beneficier de complements de revenus genereux et limites dans le temps a condition de trouver un emploi a temps plein. Afin d’evaluer l’effet de traitement moyen local du travail a plein temps sur le bien‐etre, j’ai utilise la technique d’affectation aleatoire. Pour le sous‐groupe ayant retrouve un travail a temps plein, les effets positifs sur le bien‐etre sont importants et persistent de maniere durable au Nouveau‐Brunswick tandis qu’ils ne durent qu’environ trois ans en Colombie‐Britannique. Les changements de politiques au cours de l’experience peuvent expliquer les differences entre les deux provinces.
3 citations
TL;DR: In this article, the authors consider industries where the equally skilled workers/members of firm-specific monopoly unions can be grouped according to different reservation wages, and they show that, in absence of active antidiscrimination policy, discriminatory wage contracts across groups of employees may emerge, in equilibrium, under either oligopoly or a perfectly competitive product market.
Abstract: We consider industries where the equally skilled workers/members of firm-specific monopoly unions can be grouped according to different reservation wages. We show that, in absence of active antidiscrimination policy, discriminatory wage contracts across groups of employees may emerge, in equilibrium, under either oligopoly or a perfectly competitive product market. We subsequently propose that to combat wage discrimination a benevolent policy maker should under either market structure subsidize the employment of the low reservation wage group. The reason is that taxing wage discrimination, as an alternative antidiscrimination policy, always entails a welfare loss relative to the no policy/wage discrimination status quo.
3 citations
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TL;DR: In this paper, the impact of the events of September 11, 2001 on religious and ethnic discrimination in the UK was assessed, and it was found that Pakistanis and Bangladeshis reported the greatest increase between pre-and post-event discrimination.
Abstract: It is known that a major world event caused by one group can influence perceptions of other social groups. The impact of the events of September 11, 2001 on religious and ethnic discrimination in the UK was assessed. Of seven ethnic groups, Pakistanis and Bangladeshis, who were primarily Muslim, reported the greatest increase between pre- and postevent discrimination. So, the attacks on the USA by al-Qaeda, a radical Islamic organization, activated discrimination against people of Islamic faith in the UK. These results highlight links between world events and intergroup relations, and may serve to remind norm violators that the harm they do to people of other groups can impact people of groups perceived to share their values, even in geographically distant places.
48 citations
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TL;DR: In this article, a model of how experiences are sorted into categories and how categorization affects decision-making is presented, and personal biases that result from categorization are analyzed in economic contexts.
Abstract: There is a wealth of research in psychology demonstrating that agents process information with the aid of categories. In this paper we study this phenomenon in two parts. First, we build a model of how experiences are sorted into categories and how categorization affects decision making. Second, we analyze the personal biases that result from categorization, in economic contexts. We show that discrimination can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological concept of identity, where identity is viewed as self-categorization.
46 citations
TL;DR: In this article, the industrial structure and performance of large industrial enterprises have been found to be related to their employment of blacks and women, and the analysis covers about 200 of the largest United States industrial enterprises using employment data for 1966 and 1970.
Abstract: RECENT research on employment discrimination against blacks and women suggests that no single determinant education, location, growth, or others is primary. Yet the belief persists (see Alchian and Kessel, 1962; Arrow, 1971; Ashenfeiter, 1969; Becker, 1957; Bergmann, 1971; Comanor, 1971; Shepherd, 1969; Thurow, 1969) that the employers' power to choose may be important, via their managerial preferences and discretionary resources. These influences would be visible in large industrial firms which possess market power. In this paper we test whether the industrial structure and performance of large firms have in fact been related to their employment of blacks and women. The analysis covers about 200 of the largest United States industrial enterprises, using employment data for 1966 and 1970. The focus is on white-collar employment patterns. Being more directly subject to upper management control than is blue-collar employment, the white-collar patterns may provide a sensitive test of whatever role is played by "enterprise policy" under varying conditions and constraints. First we discuss the basic hypotheses to be tested in section I. Section II explains the variables and the basic models which are to be analyzed. Section III presents the empirical results. And finally, the findings are summarized in section IV.
45 citations
TL;DR: In this paper, the authors examined data on the racial composition and financial and sporting performance of professional English soccer teams between 1974 and 1993 and found little evidence that the discrimination against black players has its source in fan discrimination.
Abstract: This paper examines data on the racial composition and financial and sporting performance of professional English soccer teams between 1974 and 1993. In an earlier paper, Szymanski showed that teams with an above average proportion of black players would tend to perform better on average that would have been expected given the aggregate wage bills of these clubs. Since players are more or less freely traded in soccer this presents strong market-based evidence of discrimination. In the present paper we explore the source of such discrimination. In particular we are concerned to test the hypothesis that discrimination is attributable to the fans rather than the owners. If fans were racially prejudiced then the owners of a team might expect to generate a smaller marginal revenue product from a black player compared to an equally skilled white player. We assess the presence of fan discrimination by examining relationships between attendance, revenues, performance and the proportion of black players in the team. We also incorporate evidence regarding statements of racial prejudice (from the British Social Attitudes Survey) in particular regions. We find little evidence that the discrimination against black players has its source in fan discrimination.
40 citations
TL;DR: In this paper, a hierarchical hierarchical work system is defined as a functional element in the hierarchical work systems, and discrimination is considered as a function of the hierarchical system, and a functional component of the hierarchy.
Abstract: I. Employer-generated discrimination, 216. — II. Discrimination as a functional element in the hierarchical work system, 220. — III. Conclusion, 228.
38 citations