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Discrimination and Skill Differences in an Equilibrium Search Model *
Author(s) -
Bowlus Audra J .,
Eckstein Zvi
Publication year - 2002
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.t01-1-00057
Subject(s) - productivity , unemployment , economics , human capital , wage , labour economics , sample (material) , statistical discrimination , econometrics , race (biology) , macroeconomics , sociology , economic growth , gender studies , chemistry , chromatography
We analyze an equilibrium search model with three sources for wage and unemployment differentials among workers with the same (observed) human capital but different appearance (race): unobserved productivity, search intensities, and discrimination due to an appearance‐based employer disutility factor. We show that the structural parameters are identified using labor market survey data. Estimation results for a black and white high school graduate sample imply: black productivity is 3.3% lower than white productivity; the employer's disutility factor is 31% of the white's productivity level; and 56% of firms have a disutility factor toward blacks.