Monopsonistic wage discrimination and employment effect under conditions of constant labor supply elasticity

This note exploits an alternative but simple way to examine the employment effect of wage discrimination when the constant elasticity labor supply curves are strictly concave. The Bernoulli inequality applied in this paper allows us to show that wage discrimination increases total employment in a relative simple way, without resorting to complicated manipulations as were used by Formby, Layson and Smith (1983) and Shieh (2001).

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Year of publication:	2006-10-03
Authors:	Shieh, Yeung-Nan
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 4.2006, 32, p. 1-4
Publisher:	AccessEcon
Subject:	Bernoulli inequality

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Extent:	application/pdf
Type of publication:	Article
Classification:	D4 - Market Structure and Pricing ; J7 - Discrimination
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010629227