Racial Discrimination in the Labor Market: Theory and Empirics

72 Pages Posted: 23 Sep 2011

See all articles by Kevin Lang

Kevin Lang

Boston University - Department of Economics; National Bureau of Economic Research (NBER)

Jee-Yeon Lehmann

University of Houston

Date Written: September 2011

Abstract

We review theories of race discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing model explains the unemployment rate differential. Models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment. At their current state of development, models of statistical discrimination based on rational stereotypes have little empirical content. It is plausible that models combining elements of the search models with statistical discrimination could fit the data. We suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy.

Suggested Citation

Lang, Kevin and Lehmann, Jee-Yeon, Racial Discrimination in the Labor Market: Theory and Empirics (September 2011). NBER Working Paper No. w17450, Available at SSRN: https://ssrn.com/abstract=1932580

Kevin Lang (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jee-Yeon Lehmann

University of Houston ( email )

Houston, TX 77204-5882
United States

HOME PAGE: http://www.uh.edu/~jlehman2/

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
33
Abstract Views
448
PlumX Metrics