Posted: June 9th, 2014

What would that suggest about the ability of labor market competition to eliminate labor market discrimination?

Labor Market Discrimination
Answers must thoroughly address the question, and are to be type written, except for the graphs, which can be hand written. The prose should be well-written with proper grammar and sentence structure. The graphs are to be clearly constructed with all parts of the graphs labeled and arrows that show appropriate shifts in supply and demand curves.
Directions: Answers must thoroughly address the question, and are to be type written, except
for the graphs, which can be hand written. The prose should be well-written with proper
grammar and sentence structure. The graphs are to be clearly constructed with all parts of the
graphs labeled and arrows that show appropriate shifts in supply and demand curves. The
possible grades on the assignment are 10, 7.5, 5, 2.5, or 0. A hard copy of the assignment is
to be handed into me at the first of class on the due date.
An ongoing public policy debate centers on the need for anti-discrimination policies, such as
Affirmative Action, to remedy labor market discrimination. On one side of the debate the
argument suggests that free and competitive markets will cause wages of workers to
converge at the level of workers’ productivity. The other side of the debate questions the
ability of markets to solve the problem of discrimination. By answering the following
questions, you should be able to make sense of both sides of the debate (hint: draw graphs or
equations where necessary).
1. Using the interrogatives that journalists use when covering a story your guide (‘who’,
‘what’, ‘when’, ‘where’, ‘why’), describe Affirmative Action policy as it applies to labor
markets.
2. Suppose we looked at discrimination according to the ‘Preference Model of
Discrimination’. What would that suggest about the ability of labor market competition to
eliminate labor market discrimination?
3. Suppose we looked at discrimination according to the model of ‘Statistical
Discrimination’. What would that suggest about the ability of labor market competition to
eliminate labor market discrimination?
4. Suppose we looked at discrimination according to the ‘Occupational Crowding’model.
What would that suggest about the ability of labor market competition to eliminate labor
market discrimination?
5. So, based on your answers to 2, 3, and 4, do we need activist policy (such as Affirmative
Action) to eliminate labor market discrimination? Why or why not?
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