Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, titulado "Competition and discrimination in labor markets with learning".

Expone: Gian Luca Carniglia, Profesor Asistente, Escuela de Negocios, UAI

Co-autor: Mauricio Ribeiro

Abstract: Traditional economic theories of discrimination have advocated for competition as a way to foster the participation of minorities and disfavored groups in the labor market. However, empirical evidence on the relationship between competition and discrimination is mixed. This paper contributes to the literature by showing that competition may increase discrimination and reduce efficiency in markets where workers’ skills are unobservable and can be publicly learned through employment relations. To illustrate this point we model the interaction between a firm and a continuum of workers with private skills over two periods. The firm receives a signal about each worker’ productivity and decides whether to make them an offer. If a worker is hired in the first period, her productivity is learned for the second period. The degree of competition in this model pushes market wage closer to expected productivity. We first show that competition reduces the firm’s incentives to experiment with low signal workers, resulting in suboptimal levels of employment. We then divide workers in two groups with equal ex-ante productivity. We show that if the tails of the induced posterior distributions for each group satisfy the monotone likelihood ratio property, then competition decreases the representation of disfavored workers. Finally, we argue that affirmative action policies can induce the socially optimal level of employment, but they need to be paired with subsidies, such as lump sum transfers or wage caps.

El formato será presencial y el seminario se desarrollará en la Sala P-303.

Saludos cordiales,

Dirección de Investigación