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Job Discrimination, Market Forces And The Invisibility Hypothesis, Paul R. Milgrom, Sharon Oster
Job Discrimination, Market Forces And The Invisibility Hypothesis, Paul R. Milgrom, Sharon Oster
Cowles Foundation Discussion Papers
The Invisibility Hypothesis holds that the job skills of disadvantaged workers are not easily observed by potential new employers, but that promotion enhances visibility and alleviates this problem. Then, at a competitive labor market equilibrium, disadvantaged workers will be paid less on average and promoted less often than other workers with the same education and ability, even if their employers are unprejudiced and know their workers’ abilities. As a result of the discriminatory wage and promotion policies, disadvantaged workers will experience lower returns to investments in human capital than other workers. An affirmative action program that eliminates discrimination and brings …
Job Discrimination, Market Forces And The Invisibility Hypothesis, Paul R. Milgrom, Sharon Oster
Job Discrimination, Market Forces And The Invisibility Hypothesis, Paul R. Milgrom, Sharon Oster
Cowles Foundation Discussion Papers
The Invisibility Hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers, but that promotion enhances visibility and alleviates this problem. Then, at a competitive labor market equilibrium, firms profit by hiding talented disadvantaged workers in low level jobs. Consequently, those workers are paid less on average and promoted less often than others with the same education and ability. As a result of the inefficient and discriminatory wage and promotion policies, disadvantaged workers experience lower returns to investments in human capital than other workers.