Labor Economics

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Chapter 8


In this chapter we will:

  • Find out why a “taste for discrimination” and monopsony power or labor market frictions may give rise to situations of discrimination, in which some persons obtain lower wages than others because of their membership in particular demographic groups
  • Learn what statistical discrimination is and why it can lead to persistent inequalities among demographic groups
  • Study the reach and the limitations of the different methods of estimating discrimination
  • Apply these methods to the black–white wage gap in the United States, relying on the contributions of Neal and Johnson (1996) and Lang and Manove (2011); and apply them to the gender gap based on the contribution of O’Neil and O’Neil (2006) (The main results of the contributions presented in this chapter can be replicated with data and programs available at
  • Assess the extent of discrimination against nonwhites, women, and homosexuals
  • Show that “better-looking” individuals have higher wages
  • Find that empirical work reveals that discrimination does explain a part of the wage differences among demographic groups but does not account for the totality of these differences


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Graphics of the chapter

Reproducing the figures and the main results

Chapter 8 figures


Lang, K., & Manove, M. (2011) "Education and labor market discrimination" American Economic Review


O'Neill, J., & O'Neill, D. (2006) "What do wage differentials tell us about labor market discrimination?" Research in Labor Economics


Teaching slides

  • Presentation Title
  • author
  • Creation date
    • Discrimination
    • Pierre Cahuc, Stéphane Carcillo, André Zylberberg
    • 12/08/2014