Question

In the taste-for-discrimination model, an increase in employer prejudice against African-American workers would cause the discrimination coefficient to_______________________ and the demand curve for African-American labor to shift__________________________. a. Decrease; right. b. Decrease; left. c. Increase; right. d. Increase; left.

Short answer

d. Increase; left.

Step-by-step solution

Understanding the Taste-for-Discrimination Model

The taste-for-discrimination model suggests that some employers have a 'discrimination coefficient' that measures the level of prejudice they have against hiring African-American workers. A higher discrimination coefficient indicates a stronger preference to avoid employing such workers, regardless of their qualifications.

Analyzing the Effect of Increased Employer Prejudice

When employer prejudice increases against African-American workers, it implies that the discrimination coefficient is higher. This is because employers are more biased against hiring these workers than before.

Impact on Demand Curve for African-American Labor

An increase in the discrimination coefficient means that employers are less willing to hire African-American workers. This reduced willingness translates into a decrease in the demand for African-American labor, thus shifting the demand curve to the left.

Selecting the Correct Answer

Given the analysis, an increase in employer prejudice leads to a higher discrimination coefficient and a leftward shift in the demand curve for African-American labor. The correct answer is 'd. Increase; left.'

Key concepts

Discrimination Coefficient

The concept of a discrimination coefficient comes from the taste-for-discrimination model in economics, which was introduced by economist Gary Becker. This model helps to quantify the level of prejudice that an employer might have against hiring workers from minority groups, such as African-American workers. But what exactly does the discrimination coefficient mean?

A discrimination coefficient can be thought of as a sort of "penalty" or additional cost that prejudiced employers perceive when considering hiring someone from a minority group. It represents how much less utility an employer derives from hiring someone against whom they are prejudiced, compared to a non-minority worker.

When the discrimination coefficient is high, it suggests a stronger prejudice or preference to avoid hiring such workers. This has real economic consequences. For employers, hiring African-American workers seems more costly, not because of their qualifications, but because of the prejudice. Therefore, a higher discrimination coefficient reduces the attractiveness of hiring minority workers, affecting their employment opportunities.

Understanding the discrimination coefficient is important because it highlights how irrational biases can distort labor markets and influence the economic opportunities of different groups. This concept shows the deep-seated impact of prejudice on employment practices and highlights the importance of combating discrimination to ensure fair labor practices.

Demand Curve for African-American Labor

In economics, a demand curve illustrates how much of a good or service is wanted at different price levels. For labor markets, the demand curve shows how many workers employers want to hire at varying wage rates. When we look specifically at the demand curve for African-American labor, we are focusing on the market for African-American workers alone.

The shape and position of this curve can reveal a lot about demand for these workers. Importantly, different factors can shift the curve left or right. A leftward shift indicates a decrease in demand, where employers want to hire fewer African-American workers at every wage level.

Various reasons can cause such a shift:

• Increasing employer prejudice, as measured by the discrimination coefficient.
• Changes in societal norms or government policies.
• Shifts in perceived productivity or qualifications not based on actual skills.

When employers' prejudice increases, they are less willing to hire African-American workers, reflecting as a leftward shift in the demand curve. This means fewer employment opportunities for these workers, not necessarily because of a change in their productivity, but due to distorted perceptions.

Overall, shifts in the demand curve for African-American labor highlight the significant practical effects of prejudice on employment and the broader economy.

Employer Prejudice

Employer prejudice refers to the biases and preconceived notions that employers might hold against a specific group of workers. In the context of the taste-for-discrimination model, employer prejudice plays a key role in determining hiring practices and labor demand.

Prejudice among employers can take various forms, ranging from a preference for workers from certain backgrounds to outright discrimination based on race, gender, or other characteristics. It is often rooted in unjustified stereotypes or societal biases. Such prejudices can result in the unfair treatment of workers, directly impacting their employment prospects and wages.

With increased employer prejudice, two main effects arise:

• The discrimination coefficient increases, representing heightened biases against hiring African-American workers.
• The demand for African-American labor falls, which shifts the demand curve to the left.

It's important to understand the role of employer prejudice because it reveals the challenges faced by minority groups in the workplace. By recognizing and addressing these prejudices, businesses and policymakers can work towards creating a more equitable and inclusive work environment, ultimately leading to a fairer economy. Encouraging diversity and reducing prejudice not only benefits the affected workers but also enriches workplaces with a wider range of perspectives and innovations.