Discrimination and skill differences in an equilibrium search model

Audra J. Bowlus, Zvi Eckstein

Research output: Contribution to journalArticlepeer-review


We analyze an equilibrium search model with three sources for wage and unemployment differentials among workers with the same (observed) human capital but different appearance (race): unobserved productivity, search intensities, and discrimination due to an appearance-based employer disutility factor. We show that the structural parameters are identified using labor market survey data. Estimation results for a black and white high school graduate sample imply: black productivity is 3.3 % lower than white productivity; the employer's disutility factor is 31% of the white's productivity level; and 56 % of firms have a disutility factor toward blacks.

Original languageEnglish
Pages (from-to)1309-1345
Number of pages37
JournalInternational Economic Review
Issue number4
StatePublished - Nov 2002
Externally publishedYes


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