Labor discrimination

Labor discrimination as defined by Kenneth Arrow is “the valuation in the marketplace of personal characteristics of the worker who is unrelated to worker productivity”. [1]It can be understood as the differentiation of workers based on color, race, origin, gender etc. that can be classified as having a role in determining its or her productivity. There are many dimensions that need to be considered when discussing such discrimination. The most obvious is that the group discriminated against is paid less for identical jobs. This is the most prevalent form of discrimination. The attempt to combat such a form of discrimination can be seen in other countries. Examples of this are the Equal Pay Act (1970), Sex Discrimination Act(1975), and Employment Protection Act (1975), but the effectiveness of such legislation is subject to much debate. Secondly, that the level of unemployment for the group in general is higher than that of other groups that do not face such discrimination. Thirdly, there is discrimination in the employment of persons with disabilities, where they are discriminated against. with equal productivity. When this happens, the group is employed for a job or is more often than not qualified for it, simply because it is more likely that it will not be able to do so. [2]A general misconception prevails that discrimination is only practiced by the employer. This is not true. In addition to employing discrimination, customer discrimination can also exist in the market. Customers may prefer to have a certain kind of people. [3]

Neoclassical theories of discrimination

Under this section, we will be dealing with the discrimination under the neoclassical label which builds on the human capital theory. To address the problem of such discrimination, it becomes important to answer two basic questions (i) To what extent is a difference in the employment structure of various groups based on differences in education and training? unequally treated? (ii) If such discrimination, as suggested, does exist, what are the explanations that can be provided to justify these? [4]

Consumer discrimination

Customer discrimination is a manifestation of personal prejudice of consumers that they prefer to trade with individuals to a certain group over others. A prevalent fact states that customers do not like being served by minorities or women. [5] For example, a white customer may be served by a white worker. This leads to two consequences (i) There is a reduction in the demand for African-American workers and (ii) If the cost of the product is P, the customer acts like he is paying P (1 + d where Pd is the cost of discrimination. [6]The fact that customer discrimination is still prevalent in the market leads to a number of consequences, that it leads to segregation of jobs , the decline in the manufacturing industry and growth in the face of the face of the crisis. [7]

Statistical discrimination

Statistical discriminationis said to be in the form of an individual who is discriminated against in the employment market. In the process of selecting a suitable candidate for a job, the use of training, training, experience, age, etc. These are two aspects of productivity. In such cases, the use of such information is one of the most important features of the group, for example, which is easily identifiable from an interview. Thus, the employee may attach the characteristics of his / her race to quantification or guess his productivity. This, thus, It is a form of discrimination that is used in the context Let us consider an example to illustrate this: Women, on average, tend to have a shorter career life than men and so, even if they have equal qualification as men, they tend to be less valuable to the company. Nowadays, it is a question of how to apply for a job, because it can be used when considering the prevalence of the application of the two applications. Hence, the career minded woman is discriminated against. Statistical discrimination leads to a systematic preference of a worker with other characteristics, and leads to a situation where women or minorities are paid less. The manifestation of the stigma is not about personal preference but it has the same effects as if was present.[3]


  1. Jump up^ “Microeconomics – Labor Market – Discrimination” . . Retrieved 2012-07-18 .
  2. Jump up^§ion=2
  3. ^ Jump up to:b (PDF) . Archived from the original (PDF) on June 7, 2010 . Retrieved October 9, 2011 . Missing or empty ( help ) |title=
  4. Jump up^§ion=5.1
  5. Jump up^
  6. Jump up^ Social Sciences. “DISCRIMINATION (Social Science)” . . Retrieved 2012-07-18 .
  7. Jump up^ “Article: AccessMyLibrary – Advoting library advocacy” . AccessMyLibrary. 1998-08-01 . Retrieved 2012-07-18 .

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