Quiz 9: Labor Market Discrimination


Shown below is the given data, Table-1 img The following observations can be made from the given data: • 60 blacks are unemployed, while 0 whites are unemployed • More whites are offered jobs in white areas of the town • More blacks are offered jobs in the black areas of the town • Despite this, there are more whites placed in black areas than blacks in white areas The above observations are strong enough to demonstrate a clear case of discrimination done in the town. More whites have been offered jobs than blacks. Infact, even in black areas, the job offers made are almost equal to whites (80) and blacks (90), whereas there is a high skewness in job offers made to white (120) and blacks (50) in white areas. This can be said to be a clear case of employer-based discrimination, wherein more whites have been preferred (even in black areas).

Discrimination coefficient is way or is coefficient by which discrimination is calculated. Suppose say discrimination factor is "d" so this "d" indicates how much discrimination is there between two in any things like in wage, or in price or anything. Discrimination coefficient plays a role of multiplier which helps in calculating actual figure of discrimination among two.

Complement goods: A good is said to be a complement goods if both are consumed together. In case of complementary goods, if the price of a good increased, then the demand for other goods will decrease. Because, both the goods are consumed at a time; hence, increase in the price of one good will increase supply of other good. Wage differential: Since white and blacks are complements, they have to work together. Since the white people productivity increases when they work with black people, hen white labor get more wage than black people. Because, wage paid to the labor should be equal to their marginal productivity of the labor. Thus, both the employees working in the same place and it creates wage differential between them.

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