Labor Market Performance Effects of Discrimination and Loss of Skill

Birthe Larsen, Gisela Waisman

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Abstrakt

We examine the impact of discrimination on labor market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment to increase in the other sector and the effect on labor market performance therefore depends on whether discrimination is present in only one sector or in both. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon in which sector there is discrimination. Net output tends to be most negatively affected by discrimination among high-skilled workers.
OriginalsprogEngelsk
TidsskriftEconomic Inquiry
Vol/bind54
Udgave nummer3
Sider (fra-til)1574-1595
Antal sider22
ISSN0095-2583
DOI
StatusUdgivet - 2016

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