econ113011 - Microeconomics November 30th, 2011...

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November 30 th , 2011 Discrimination in Labor Markets Why economists don’t care. Why they should. Big Ideas 1. Orthodox economists do not discuss discrimination because they assume that competitive markets will eliminate it. 2. But even in the orthodox approach, discrimination can be maintained by restricting access to training. 3. We have at least partly overcome discrimination in some fields by requiring equal access to higher education. Government policy has been less effective in occupations dependent on worker- and company-managed training programs. 4. By crowding workers into few occupations, discrimination lowers wages of women and minorities, and benefits those who consume the services they provide. Because of Jackie Robinson (of the Brooklyn Dodgers), economists think that discrimination will go away on its own (with free markets) The story : Before him, African-Americans were not allowed to play major league baseball. The owners indulged their taste for discrimination by only hiring white players. False - African Americans played major leagues before Robinson. They were driven out. After 1947, Former Negro League Players were better than whites. - They produced more runs per at bat – 3% more. - They produced more wins – 2.42 for every regular player. - They raised attendance and team profits. Ending segregation was good business. So why was integration such a fight? Winners and losers from baseball discrimination Winner - Racist Owners - Mediocre white players - Owners of Negro Leagues - Dedicated negro-league fans Loser - African American players - Major League fans African American players kept out of the Major Leagues - They suffered financially. -
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econ113011 - Microeconomics November 30th, 2011...

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