Endogenous Inequality in Integrated Labor Markets with Two-Sided Search

George J Mailath; Larry Samuelson; Avner Shaked

doi:10.1257/aer.90.1.46

journal article Mar 01, 2000

Endogenous Inequality in Integrated Labor Markets with Two-Sided Search

George J Mailath Larry Samuelson Avner Shaked

American Economic Review Vol. 90 No. 1 pp. 46-72 · American Economic Association

View at Publisher Save 10.1257/aer.90.1.46

Abstract

We consider a market with “red” and “green” workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. There are also asymmetric equilibria in which firms search only for green workers, more green than red workers acquire skills, skilled green workers receive higher wages, and the unemployment rate is higher among skilled red workers. Discrimination between ex ante identical individuals arises in equilibrium, and yet firms have perfect information about their workers, and strictly prefer to hire minority workers. (JEL C70, D40, J30)

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Cited By

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GENDER DISCRIMINATION ESTIMATION IN A SEARCH MODEL WITH MATCHING AND BARGAINING*

Luca Flabbi · 2010

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Metrics

80

Citations

13

References

Details

Published: Mar 01, 2000
Vol/Issue: 90(1)
Pages: 46-72

Authors

G

George J Mailath

Department of Economics, University of Pennsylvania, 3718 Locust Walk, Philadelphia, PA 19104.

L

Larry Samuelson

Department of Economics, University of Wisconsin, 1180 Observatory Drive, Madison, WI 53706.

A

Avner Shaked

Department of Economics, University of Bonn, Adenauerallee 24-26, D 53113 Bonn, Germany.

Cite This Article

George J Mailath, Larry Samuelson, Avner Shaked (2000). Endogenous Inequality in Integrated Labor Markets with Two-Sided Search. American Economic Review, 90(1), 46-72. https://doi.org/10.1257/aer.90.1.46

Endogenous Inequality in Integrated Labor Markets with Two-Sided Search

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