An Asymmetric Information Theory of Labor Market Discrimination

1991 ◽  
Vol 57 (4) ◽  
pp. 1148 ◽  
Author(s):  
Marjorie Baldwin
Keyword(s):  
Information Theory ◽  
Labor Market ◽  
Asymmetric Information ◽  
Labor Market Discrimination

scholarly journals Detecting Discrimination

1998 ◽  
Vol 12 (2) ◽  
pp. 101-116 ◽  
Author(s):  
James J Heckman
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Labor Market Discrimination ◽  
Gender Groups ◽  
The Way

The evidence on discrimination produced from the audit method is examined. Audits survey the average firm and not the marginal firm which determines the level of market discrimination. Taken on its own terms, there is little evidence of labor market discrimination from audit methods. The validity of audit methods is critically dependent on unverified assumptions about equality across race/gender groups of the distributions of unobserved (by audit designers) productivity components acted on by firms and about the way labor markets work. Audits can find discrimination when none exists and can disguise it when it does.

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