then introduce discrimination between two sets of equally qualified
workers. The discussion here is phrased in terms of males and females,
but the analysis applies equally well to any situation in which workers are
distinguished on grounds other than their ability, such as race or skin
colour, citizenship, religion, sexual orientation, or political beliefs.
A Model Without Discrimination
Suppose half of the people in the labour force are male and the other half
are female. Each group has the same proportion who are educated to
various levels, identical distributions of talent, and so on. Suppose also
that there are two occupations. Occupation E (elite) requires people of
above-average education and skills, and occupation O (ordinary) can use
anyone. Finally, suppose the non-monetary aspects of the two
occupations are the same.
In the absence of discrimination, the theory of competitive factor markets
that we have developed suggests that the wages in E occupations will be
bid up above those in O occupations in order that the E jobs attract the
workers of above-average skills. Men and women of above-average skill
will take the E jobs, while the others, both men and women, will have no
choice but to seek O jobs. Because skills are equally distributed between
both sexes, each occupation will employ one-half men and one-half
women.
A Model with Discrimination