Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35929 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4490
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
The paper explains how workers' expectations of being discriminated against can be self-confirming, accounting for the persistence of unequal outcomes in the labour market even beyond the causes that originally generated them. The theoretical framework used is a two-stage game of incomplete information in which one employer promotes only one among two workers after having observed their productivity, which is used as a signal of their ability. Workers who expect to be discriminated against exert a lower effort on average, because of a lower expected return, thereby being promoted less frequently even by unbiased employers. This implies that achievements of minority groups may not improve when the fraction of discriminatory employers actually decreases, and such a mechanism is robust both to trial work periods and to affirmative actions like quotas.
Subjects: 
Discrimination
workers'
expectations
self-confirming beliefs
JEL: 
J71
J15
J24
D82
C79
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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