Economic Models of Discrimination

  • Brian Chiplin
  • Peter J. Sloane


Most of the economic models of discrimination have been primarily directed towards racial discrimination though it is acknowledged either explicitly or implicitly that they are also applicable to sex discrimination. However, there are important differences between race and sex, particularly on the supply side, and the application of models of racial discrimination to sex must be handled with considerable caution. Whilst it is true that there is a substantial area of overlap, it must not be assumed that predictions relating to race automatically apply to sex. For instance, in his survey of the economics of racial discrimination, Ray Marshall suggests that a major shortcoming of neoclassical theory is the implication that equally qualified blacks and whites doing identical jobs in the same firms are paid different wages.1 This he regards as unrealistic and yet it is precisely what has happened to some of the female population.


Depression Transportation Income Expense Monopoly 


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  1. 2.
    See for instance, Finis Welch, ‘Human Capital Theory: Education, Discrimination and Life Cycles’, AER Papers and Proceedings (May 1975), and ’Education and Racial Discrimination’, in Orley Ashenfelter and Albert Rees (ed), Discrimination in Labor Markets (Princeton University Press, 1973).Google Scholar
  2. 5.
    This is consistent with a definition of wage discrimination offered by J. E. Stiglitz, ‘Approaches to the Economics of Discrimination’, American Economic Review Papers and Proceedings (May 1973). He states: ’There is wage discrimination if individuals with the same economic characteristics receive different wages and the differences are systematically correlated with certain non-economic (racial, religious) characteristics of the individual.’ He suggests an economic characteristic is anything which affects the net marginal productivity of a worker, allowance being made for training and hiring costs.Google Scholar
  3. 6.
    Gary S. Becker, The Economics of Discrimination (Chicago: University of Chicago Press, 2nd ed., 1971 ).CrossRefGoogle Scholar
  4. 8.
    Kenneth J. Arrow, ‘Models of Job Discrimination’ and ’Some Mathematical Models of Race Discrimination in the Labor Market’, in Anthony H. Pascal (ed.), Racial Discrimination in Economic Life ( Lexington, Mass.: D. C. Heath, 1972 ); also ’The Theory of Discrimination’, in Orley Ashenfelter and Albert Rees (eds), Discrimination in Labor Markets, op. cit.Google Scholar
  5. 14.
    For a detailed discussion see Joseph E. Stiglitz, ‘Theories of Discrimination and Economic Policy’, in G. M. von Furstenburg, Ann R. Horowitz and B. Harrison (eds), Patterns of Racial Discrimination (D. C. Heath, Lexington Books, 1974 ). We return to the issue in the following chapter.Google Scholar
  6. 24.
    Lester C. Thurow, Poverty and Discrimination, Studies in Social Economics ( Washington D.C.: The Brookings Institution, 1969 ).Google Scholar
  7. 29.
    Francine B. Weisskoff, ‘Women’s Place in the Labour Market’, American Economic Review, Papers and Proceedings (May 1972).Google Scholar
  8. 30.
    H. Zellner, ‘Discrimination Against Women, Occupational Segregation and the Relative Wage,’ American Economic Review Papers and Proceedings (May 1972).Google Scholar
  9. 37.
    Barbara B. Reagan, ‘Two Supply Curves for Economists? Implications of Mobility and Career Attachment of Women’, American Economic Review, Papers and Proceedings (May 1975).Google Scholar
  10. 40.
    For an elaboration see P. J. Sloane and B. Chiplin, ‘The Economic Consequences of the Equal Pay Act 1970’, op. cit.; Richard B. Mancke, ’Lower Pay for Women: A Case of Economic Discrimination?’, Industrial Relations, 10 (1971);Google Scholar
  11. Gary L. Gaumer, ‘Sex Discrimination and Job Tenure’, Industrial Relations, 13 (1974). For a discussion on the evidence on turnover see Chapter 7 below.Google Scholar
  12. 41.
    See for instance, Peter B. Doeringer and Michael F. Piore, Internal Labour Markets and Manpower Analysis (Lexington, Mass.: D. C. Heath, 1971)Google Scholar
  13. N. Bosanquet and P. B. Doeringer, ‘Is there a Dual Labour Market in Great Britain?’, Economic Journal (June 1973).Google Scholar
  14. 43.
    H. M. Watchel and C. Betsey, ‘Employment at Low Wages’, Review of Economics and Statistics (May 1972).Google Scholar

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© Brian Chiplin and Peter J. Sloane 1976

Authors and Affiliations

  • Brian Chiplin
  • Peter J. Sloane

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