In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African-American wage rate, and lower the ratio of African-American to white wages.

Question

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In the taste-for-discrimination model, if employers have a preference against hiring African-American workers (an increase in prejudice), they will demand fewer African-American workers compared to white workers. This decreased demand for African-American workers leads to lower wages for them, thus reducing the ratio of African-American to white wages.

In the Taste-For-Discrimination Model, an Increase in the Prejudice of Employers