This paper assesses two economic perspectives on racial discrimination in labour markets: the ‘Chicago school’ claims racial discrimination is a temporary phenomenon which is removed by competition; whereas more recent economics claims that labour markets are imperfect, so discrimination may be long-lasting. This paper reports evidence from USA and UK on earnings of ethnic minorities relative to the white majority. In recent decades, USA and UK governments have enacted legislation to prevent discrimination; this has been partly effective, but discrimination persists in both countries. Further action is required to reduce inefficiencies associated with discrimination.
Get full access to this article
View all access options for this article.
References
1.
BendickM. (1982). “Employment, training, and economic development” in PalmerJ.L.SawhillI.V. (eds.), The Reagan experiment: an examination of economic and social policies under the Reagan administration, the Urban Institute: Washington, D.C.
2.
BursteinP.EdwardsM.E. (1994). “The impact of employment discrimination litigation on racial disparity in earnings: evidence and unresolved issues”, Law & Society Review, 28(1), 79–111.
3.
ButlerD.StokesD. (1974). Political change in Britain: the evolution of electoral choice, Macmillan: London.
4.
ChiswickB.R. (1980). “The earnings of white and coloured male immigrants in Britain”, Economica, 47(1), 81–7.
5.
CrowG. (1989). “The use of the concept of ‘strategy’ in recent sociological literature”, Sociology, 23(1), 1–24.
Gallup (2000). “Gallup Social and Economic Indicators—Immigration”, <http://www.gallup.com/poll/indicators>, accessed: 5th January 2000.
8.
GreeneW.H. (1991). Limdep user’s manual and reference guide version 6.0, Econometric Software Inc.: Bellport, N.Y.
9.
GroggerJ. (1996). “Does school quality explain the recent black/white wage trend?”, Journal of Labor Economics, 14(2), 231–53.
10.
HaagsmaR. (1998). “Statistical discrimination in the labour market: an efficient vice?”De Economist, 146(2), 321–45.
11.
HarropA.PlewisI. (1995). “Two decades of family change: secondary analysis of continuous government surveys”, Journal of the Royal Statistical Society: series A, 158(1), 91–106.
12.
HolzerHarry J.IhlanfeldtKeith R. (1998). “Customer discrimination and employment outcomes for minority workers”, Quarterly Journal of Economics, 113(3), 835–67.
13.
IchinoP. (1998). “The labour market: a lawyer’s view of economic arguments”, International Labour Review, 137(3), 299–311.
14.
JonesJ.M. (1986). “Racism: a cultural analysis of the problem”, in DovidoJ.F.GaertnerS.L., Prejudice, discrimination, and racism, Academic Press: Orlando.
15.
JowellR.CurticeJ.ParkA.BrookL.ThomsonK.BrysonC. (eds.) (1998). British—and European—social attitudes, the 15th report: how Britain differs, Ashgate: Aldershot.
16.
KatzI.WackenhutJ.HassR.G. (1986). “Racial ambivalence, value duality, and behaviour”, in DovidoJ.F.GaertnerS.L. (eds.), Prejudice, discrimination, and racism, Academic Press: Orlando.
17.
LundbergShellyStartzRichard (1998). “On the persistence of racial inequality”, Journal of Labor Economics, 16(2), 292–323.
18.
MaskinE.TiroleJ. (1990). “The Principal-Agent relationship with an informed Principal: the case of private values”, Econometrica, 58(2), 379–409.
McCroneD.SurridgeP. (1998). “National identity and national pride”, in JowellR.CurticeJ.ParkA.BrookL.ThomsonK.BrysonC. (eds.), British—and European—social attitudes, the 15th report: how Britain differs, Ashgate: Aldershot.
21.
McCruddenC.SmithD.J.BrownC. (1991). Racial justice at work: the enforcement of the Race Relations Act 1976 in employment, Policy Studies Institute: London.
22.
McNabbR.PsacharopoulosG. (1981). “Racial earnings in the U.K.”, Oxford Economic Papers, 33(3), 413–25.
23.
ModoodT. (1997). “Employment”, in ModoodT.BerthoudR.LakeyJ.NazrooJ.SmithP.VirdeeS.BeishonS. (eds.), Ethnic Minorities in Britain: diversity and disadvantage, Policy Studies Institute: London.
24.
NordS.TingY. (1994). “Discrimination and the unemployment durations of white and black males”, Applied Economics, 26(10), 969–979.
25.
ONS (1999). Annual Abstract of Statistics, the Stationery Office: London.
26.
RhodesE.BrahamP. (1981). “Black workers in Britain: from full employment to recession”, in BrahamP.RhodesE.PearnM. (eds.), Discrimination and disadvantage in employment: the experience of black workers, Harper & Row: London.
27.
SahaA.CappsO.ByrneP.J. (1997). “Calculating marginal effects in models for zero expenditures in household budgets using a Heckman-type correction”, Applied Economics, 29(10), 1311–6.
28.
SkinnerC. (1995). “Urban labor markets and young black men: a literature review”, Journal of Economic Issues, 29(1), 47–65.
29.
SolomosJ. (1989). “The politics of anti-discrimination: planned social reform or symbolic politics?” in JenkinsR.SolomosJ. (eds.), Racism and equal opportunity policies in the 1980s, CUP: Cambridge.
30.
StewartM.B. (1983). “Racial discrimination and occupational attainment in Britain”, Economic Journal, 93(3), 521–41.
31.
U.S. Census Bureau (1999). “Table P-4: race and hispanic origin of people (both sexes combined) by median and mean income: 1947 to 1998”, http://blue.census.gov/hhes/income/histinc/p04.html>, accessed: 14/12/1999.
32.
WainwrightD. (1979). Discrimination in employment: a guide to equal opportunity, Associated Business Press: London.
