Macroeconomics of Racial Disparities: Discrimination, Labor Market, and Wealth
Fuente:
arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| _version_ | 1866908988256288768 |
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| author | Yang, Guanyi Murali, Srinivasan |
| author_facet | Yang, Guanyi Murali, Srinivasan |
| contents | This paper examines the impact of racial discrimination in hiring on employment, wages, and wealth disparities between black and white workers. Using a labor search-and-matching model with racially prejudiced and non-prejudiced firms, we show that labor market frictions sustain discriminatory practices as an equilibrium outcome. These practices account for 57% of the racial unemployment gap, 48% of the average wage gap, and 16% of the median wealth gap. Discriminatory hiring also increases unemployment and wage volatility for black workers, increasing their labor market risks over the business cycle. Eliminating prejudiced firms reduces these disparities and improves the welfare of black workers as well as the overall economic welfare. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2412_00615 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Macroeconomics of Racial Disparities: Discrimination, Labor Market, and Wealth Yang, Guanyi Murali, Srinivasan General Economics Economics This paper examines the impact of racial discrimination in hiring on employment, wages, and wealth disparities between black and white workers. Using a labor search-and-matching model with racially prejudiced and non-prejudiced firms, we show that labor market frictions sustain discriminatory practices as an equilibrium outcome. These practices account for 57% of the racial unemployment gap, 48% of the average wage gap, and 16% of the median wealth gap. Discriminatory hiring also increases unemployment and wage volatility for black workers, increasing their labor market risks over the business cycle. Eliminating prejudiced firms reduces these disparities and improves the welfare of black workers as well as the overall economic welfare. |
| title | Macroeconomics of Racial Disparities: Discrimination, Labor Market, and Wealth |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2412.00615 |