Racial Discrimination in the Job Market : The Role of Information and Search.

by John McCall

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A theory of the value of discrimination in the job market as a function of the business cycle, based on elementary models of economic behavior in which, among other things, employer uncertainty about employee capacity to produce is incorporated. A favorable economic environment is assumed to induce employers to engage in hiring experiments, which, if they prove favorable, may eliminate race as a screening device when labor markets become less tight. If valid, the hypothesis implies that discrimination by employers--and by the nonwhite poor in their job search--is explicable on purely economic grounds and that a tight labor market could cause both groups to alter beliefs that give rise to discriminatory practices.

This report is part of the RAND Corporation Research memorandum series. The Research Memorandum was a product of the RAND Corporation from 1948 to 1973 that represented working papers meant to report current results of RAND research to appropriate audiences.

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