Labour- market discrimination, which keeps one group of workers out of elite (E) occupations and limits them to ordinary (O) occupations, will have which of the following effects?

Question

Quizplus · Accepted Answer

Labour-market discrimination against a particular group of workers in E occupations will limit their job opportunities, leading to a decrease in supply of workers in the E occupations. This will cause an increase in wages in E occupations due to the shortage of workers. On the other hand, the supply of workers in O occupations will increase due to the exclusion of the discriminated workers from E occupations, leading to a decrease in wages in O occupations. Therefore, labor-market discrimination will have the effect of decreasing the supply and higher wages in E occupations.

Labour- Market Discrimination, Which Keeps One Group of Workers Out