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Discrimination and Employment Protection

Author

Listed:
  • Åsa Rosén

    (stockholm University)

  • Steinar Holden

    (Oslo University)

Abstract
We study a search model with firing cost. We show that there exists an equilibrium with discriminatory hiring standards of worker only differing in an observable characteristic determining their type. Even though the firm can observe the workers' expected productivity at the hiring stage, it still may condition its hiring standard on group belonging, due to feedback effects of other firm' hiring standards. The model predicts higher unemployment rates, stricter hiring standards, longer tenure for discriminated workers and a positive relation between employment protection and relative unemployment rates for discriminated workers.

Suggested Citation

  • Åsa Rosén & Steinar Holden, 2009. "Discrimination and Employment Protection," 2009 Meeting Papers 350, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:350
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    References listed on IDEAS

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    Cited by:

    1. Deschamps, Pierre & De Sousa, José, 2021. "Labor mobility and racial discrimination," European Economic Review, Elsevier, vol. 135(C).
    2. repec:spo:wpmain:info:hdl:2441/6ftmcu468j8a49bft2hrpi6uql is not listed on IDEAS
    3. Bruno Decreuse & Linas Tarasonis, 2016. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Working Papers halshs-01327961, HAL.
    4. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2012. "Immigrant wage profiles within and between establishments," Labour Economics, Elsevier, vol. 19(4), pages 541-556.
    5. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.
    6. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2017. "Talent, Career Choice and Competition: The Gender Wage Gap at the Top," Working Paper Series 1169, Research Institute of Industrial Economics, revised 06 Mar 2023.
    7. repec:hal:spmain:info:hdl:2441/6ftmcu468j8a49bft2hrpi6uql is not listed on IDEAS
    8. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    9. Emiko Usui, 2015. "Occupational gender segregation in an equilibrium search model," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-14, December.
    10. Lagerlöf, Johan N.M., 2020. "Strategic gains from discrimination," European Economic Review, Elsevier, vol. 122(C).
    11. Basu,Kaushik, 2015. "Discrimination as a coordination device : markets and the emergence of identity," Policy Research Working Paper Series 7490, The World Bank.
    12. Johan N. M. Lagerlöf, 2016. "Strategic Gains from Labor Market Discrimination," Discussion Papers 16-03, University of Copenhagen. Department of Economics.
    13. Persson, Lars & Heyman, Fredrik & Norbäck, Pehr-Johan, 2018. "Gender Wage Gap at the Top, Job Inflexibility and Product Market Competition," CEPR Discussion Papers 13075, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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