Discrimination, Economics of

Ronald Oaxaca

Research output: Chapter in Book/Report/Conference proceedingChapter


In the abstract, 'discrimination' refers to distinctions or differentiation made among objects or individuals. In economics, as in ordinary parlance, discrimination typically carries a pejorative connotation. The term is generally reserved for distinctions that are socially unacceptable and economically inefficient. Economic theories of discrimination can be categorized into theories about tastes and preferences of economic agents, economic power, and statistical discrimination. Achieving a consensus on what the broad features of discrimination in markets, especially labor markets, should entail is a seemingly straightforward task compared with obtaining a consensus on empirical measures of discrimination. The standard measurement technique is that of wage decompositions. With the advent of newer and more sophisticated econometric methods for estimating earning relationships, measurement of discrimination has become more ambiguous. Legal and employee morale considerations constrain attempts to remove discrimination in the workplace in a way that would correspond to accepted economic principles of efficiency. Comparable worth seeks to remedy discrimination by relying upon experts to value job attributes in an unbiased manner. Empirical studies of labor-market discrimination are global in nature and encompass both developed countries and developing countries.

Original languageEnglish (US)
Title of host publicationInternational Encyclopedia of the Social & Behavioral Sciences: Second Edition
PublisherElsevier Inc.
Number of pages6
ISBN (Electronic)9780080970875
ISBN (Print)9780080970868
StatePublished - Mar 26 2015
Externally publishedYes


  • Consensus
  • Differentiation
  • Earnings potential
  • Income inequality
  • Median income
  • Monopsony power
  • Pejorative connotation
  • Reduced competition
  • Segregation
  • Wage decompositions

ASJC Scopus subject areas

  • Social Sciences(all)


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