ECONOMics OF . ® DPscRPMINATION Discrimination arises ahew agents tr Re market take into account factors Such a< yace £naer Whew Making and changes. economic & ®© Coste and benefits of excharge fepend ow gener, yact, Casteek Ihy does this heppen’ ikon tam ; Prccdnnds L : Gary Beckers . A tach: Aec Aiserniminaher (Ait canimber Coup ieut) 2 Ea 3) ow +o Mmeasuye AlSCrminadegy,?GARY BECKERS Novel @ @ 3 Sovrces oF Disceinfuarions- LP EMPLOYER ) gave a ® EMPLOYEE “TASTE FoR ol. CUSTOMER _)DIscRINination @urtctry- ADJUSTED FR. rCcES s= @ W,, and We 3 BECAUSE OF PeEeTuDi cE AGAINST 4B‘ WORKERS: W 14 A) => Cost of hiv BX ¢ i 7 Oe water Aigeriminakow Coetf cient —— ee a eS NoTEs ConVERSE > NEPOTICM We = We ¥ (1-1) é nepekinn © Foe DiccerRinin Coed ficient “we WORKERS | +2 Ww, Cl—d) © Fee DS SCRINANATORY “Wl Cu Stones: p= pCi+a)— ERS ‘EMPLOYER DiscRininwtioh> ane Aw pRB’ WeRKEeS PERFECT SUBSTITUTES Pr epuction FUNCTION:— +. = ¢ (Ewr Er) Note: 4 depends on total, ret takes Kecume KiStoncally We < Ww ub EMpLoyMENT DECrHION OF A Ni oNe Dis CRINUNATORY FIPRN:— cocou® BLINP | \ DL vm ) |Wwe Employment ina Disciaminatey FO Employers Compare. Ww and We (itd) os Decifiow Rule: — live only B iff We (1+ A) Wey ere only W St We +d) 7 Ww w Assume: Wy > We ond W aaB Dene subsites. o \ t‘Ohtke Wo — iE! ES E.* ryt ; conn” : Shree ae too hog iO, ew ® Even i hiring too fed w okers Whew oO Ew Note: O bs io ‘Sou. Deeps uv 2 ways hen ? re W workers ‘perfect Cy bshte OS picorininadory Aches by i employe == >> ‘Ceqveqated werleicesWw Disoiminakion & Profte :- © Main result: Acs rimenaton Does eae 5 Cempetchen est for rindi 4 fh J wo Yms i Hier s \ Oat, d= a T Max dy AS Epler. blind firms hire all B wires I, LES OMAP TY dub Sh all B ecorifirce At Sore. 2 Awd, vhick-less af Charing ‘Be i tale ae i) Myred. Reefs Hop chap ve ofc al a fms love: fr Olws, rt ge Aer palais» cava | NeTte:ue Labour Marker Sauilkbsue @ ard he B-W tale a we Assume io All employers Als Cyiminate aginst & workers ¢, A. 70 S a evfe H : Wleakic. Sy. Cshovt-vun) ° N Black N eTe: “Enoplaywest ( Employer Aiscrminakon generates a wage 9 between Brat W perfec Cal stetvatle werkers. @® All ecatier f B woyvkers to firms Thy s ing 4 B net vardom yee ate lee Enh workers wifk My workers witk fens wifk Wi gh «~ Z oe 6) Ex pl ain Enclave, Economiesuc Enproyee Discrinu nation @ feesght oa pac Fas TNi @w DW Argslike workin ee B, but B VMP indifferent of colour. 7. Ww st Wye) acel We Results: - ania —D Coler- blind em over WO ne on inh Cato diverbhree (Ce him/her, Wg = Wo (Same VMP). @ dees net pos taix Weck. e piecneensleon inaplies penal a segregate work fovee- & Vrlike empleo emple ee ANS ate 7 vty a Arlperka . Compehtvs ensures Ww = a5 © Enya a ee aan Ooes eine’ fms profitat: lity. Snes mar oe eomnngh employee Alscriminaken, Over Hime. ex HY ecvininahionseCustomer Discrimination: © — Net p, but bU+A) { L placing kK Wwarkers, queshen ef. “public view 23. airlines, ve stuucords, Ales <4. Customer Disc minahow Owe NBA , Wee +o test? , L “Dif feren ce- ine Differences Metreuw” Difference -in- differences txauple “. “Customer Aisouparahae TABLE: Relabion petveen Customer Discriminahiow ork Jo of newly hived, Wrokers Sho cree pack ot 2 OT" Usovk ers TTREATHENT GRovt] ct . tro Condnct Shem 4.62 12-2, 3647, (erwin [ConTRoL Geove De ffercute- cn - ' Ax Herenrces * ~ ~ (4 62STATPSTICAL PXSCRINGN ATION Absence of Prejuavee, imperfect . information, membersheop tr a Group Carries Valuable’ informahion. ucdmpack | of Sak sheaf Disovimineke en We Lab — a » w= (-L)T HLT bWhere:-T= a combined tes} Stove S = Covrelabon between Tact , Prodvehvity e et = qvoup average w of A=1,T predicts prodvek vity pevfectly , «6 We MP= T of Leo no Covvelahenw fetween 7 x i pode produck vit, form ves T. cre Mncfovmation, iver ? aN. 2. © cree resins yers Use “Group average () Race-Norming and Gender horming Ltoves <Staktheol RScorininaponw (i AH We La Recatt, We CG-4)T thT Here '— Aw 7 Xp oy Tests biased insk blacksMeasuring Wage Drscrisinadion(2) Raw wage Aiffential : — AB = Wr- We 2 Sf ket, Wm = A nn a Rin Sin [ ee Wee Ae + Be S- | a =p e 7 Onn -We = int Bm Sm — Xe — Be Se The OAXACA decompositven adds and and Subfracks mn Se to Re eus to get'— Die Km-% + Pa Pe)Se where! — Bm (Su- Sp) (Ain = Le) + (Pom -Pr) Ss. S Pentve = Wage DHertil Queto hen om Pile eater Bn oRe Piece Minatinn Bu (Sie Se) = Wage Dffertial Bere ) 7 Ribpences SbiIg umn. pilicees Sets eanOAXACA MovEL GRAPHCALLYs @) weg? t Male Zacreqo:— ws Wn = om + Be \n ae eet Female. Sanne, Wwe bp ate S my We ! ' ‘ 3, nn zn —PScheoluie (wig*— We) > ae ove to (Fn oe) * repild uve shen: Does Re Oaxata. ORO mr Yeally ‘meosuy® “Aecomp erwin TORK >Shoadement:— — @® we Theories of Di souimeradeon enbireby “Aemand - Side eplansderny (Al b*. ra y- Side ot labor make efeckv neutalizet 4 ex. wbsctekes aScunephon pach es eqnad tnstie fr wok. aie leituve- i Ah Additional Topics = aes later maker nm * Dla mer ovs oe ub ‘Ocevpakonal Crowding” on /Oceupakore Seqresaiow a vable_ Werk Cesky ave. School teaches all of he ccheal badly PaiAdr]