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2. One of the models for discrimination which we discussed in class is Becker's 'taste for discrimination' model. Consider a labor market comprised of male
2. One of the models for discrimination which we discussed in class is Becker's 'taste for discrimination' model. Consider a labor market comprised of male and female employees. In this labor market, some employers are prejudiced against female workers. Recall that in Becker's model, we characterize this prejudice using positive discrimination coefficients, d. The market wage rate for male workers is $25, while the market wage rate for female workers is $21.50. Presently, 10,000 women are employed in this labor market. (a) Firm A has a discrimination coefficient of d = 3. Will Firm A hire male workers, female workers, or both types of workers? (b) Becker's model of discrimination characterizes discriminatory behavior by firms as costly. Will Firm A pay any cost related to discrimination? If so, what is this cost? (c) What is the ratio of female to male wages in this labor market? (d) With the wage ratio on the Y axis and the female employment level on the X axis, graph the current equilibrium in the labor market for female employees. Assume that some firms in this market are not prejudiced. (e) Explain why this model of taste-based discrimination predicts that, eventually, discrimination against women will disappear from this labor market. (f) Identify and briefly explain two criticisms of Becker's model of discrimination
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