Suppose an employer is biased against African Americans. If his discrimination coefficient is $2, the employer will

Question

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The discrimination coefficient represents the monetary value of the employer's bias against hiring African Americans. If the wage differential is less than the discrimination coefficient ($2 in this case), the employer's bias outweighs the cost savings from hiring lower-wage African American workers, leading the employer to hire only white workers.

Suppose an Employer Is Biased Against African Americans