Chapter 10: Legislation in Labour markets

Introduction to Discrimination in Labour Markets

What you’ll learn to do: analyze the economic implications of discrimination and immigration policies

Discrimination occurs in a labour market when employers pay workers with the same economic characteristics, such as education, experience, and skill, are paid different amounts because of race, gender, religion, age, or disability status. In the United States, female workers on average earn less than male workers, and black workers on average earn less than white workers. There is controversy over the extent to which pay differences are caused by differences in factors like education and job experience, or by pure discrimination.

Free markets can allow discrimination to occur, but the threat of a loss of sales or a loss of productive workers can also create incentives for a firm not to discriminate. A range of public policies can be used to reduce earnings gaps between men and women or between white and other racial/ethnic groups: requiring equal pay for equal work, and attaining more equal educational outcomes.

In this section, we will examine these policies as well as the economic take on immigration.

Attribution

Except where otherwise noted, this chapter (images and text) is adapted from “Introduction to Discrimination in Labor Markets“ In Microeconomics by Lumen Learning, licensed under CC BY 4.0. A derivative of “Immigration” In Principles of Economics 2e by Steven A. Greenlaw & David Shapiro (OpenStax), licensed under CC BY.

Access for free at Principles of Microeconomics 2e