Working Paper Series, Department of Economics, Copenhagen Business School
Labour Market Performance Effects of Discrimination and Loss of Skill
() and Gisela Waisman
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
Welfare tends to be most negatively affected by discrimination
among high- productivity workers.
Keywords: discrimination; unemployment; search and matching; wages; (follow links to similar papers)
JEL-Codes: J15; J31; J61; J64; J71; (follow links to similar papers)
35 pages, October 15, 2012
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