Labour Market Performance Effects of Discrimination and Loss of Skill

Birthe Larsen, Gisela Waisman

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Abstract

We examine the impact of discrimination on labour market performance when workers are subject to a risk of losing skills during the experience of unemployment. Within a search and matching model, we show that all natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment increases in the other sector. Discrimination may induce immigrants to train more or less than natives, depending on the sector where it is present. Welfare tends to be most negatively affected by discrimination among highproductivity workers.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School, CBS
Number of pages38
Publication statusPublished - 20 Jul 2015
SeriesWorking Paper / Department of Economics. Copenhagen Business School
Number2-2015

Cite this

Larsen, B., & Waisman, G. (2015). Labour Market Performance Effects of Discrimination and Loss of Skill. Copenhagen Business School, CBS. Working Paper / Department of Economics. Copenhagen Business School, No. 2-2015