Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34154 
Authors: 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 2421
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper considers a labour market model of monopsonistic competition with taste-based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality. When the taste for discrimination is small or competition is weak, the policy removes job segregation and the wage gap completely. However, with a bigger taste for discrimination or stronger competition, equal pay legislation leads to more job segregation, and sometimes minority workers end up earning less than before. Profits of discriminating firms may increase, and discrimination can persist in the long run although it would have disappeared without the policy.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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