Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35746
Authors: 
Kaas, Leo
Lu, Jun
Year of Publication: 
2009
Series/Report no.: 
IZA discussion papers 4173
Abstract: 
We consider a search model of the labor market with two types of equally productive workers and two types of firms, discriminators and non-discriminators. Without policy intervention, there is wage dispersion between and within the two worker groups, but all wage differences become negligible when the taste for discrimination is small. We analyze the effect of an equal-pay policy, both in combination with affirmative action and without. When equal opportunity of hiring cannot be enforced, wage dispersion increases and wages for minority workers fall substantially relative to laissez faire. Sometimes also the wage gap between worker groups widens in response to the policy.
Subjects: 
Search model
wage dispersion
discrimination
equal pay policy
JEL: 
J41
J71
J78
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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