Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149150
Authors: 
Salamanca, Nicolas
Feld, Jan
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10291
Abstract: 
We extend Becker's model of discrimination by allowing firms to have discriminatory and favoring preferences simultaneously. We draw the two-preference parallel for the marginal firm, illustrate the implications for wage differentials, and consider the implied long-run equilibrium. In the short-run, wage differentials depend on relative preferences. However, in the long-run, market forces drive out discriminatory but not favoring firms.
Subjects: 
wage gap
nepotism
firm preferences
long-run equilibrium
JEL: 
J70
J31
Document Type: 
Working Paper

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