On the labor market effects of salience of ethnic/racial disputes
An increase in the salience of ethnic/racial (E/R) disputes often signifies a shift in the E/R status quo of a society. We present a labor market model where matching frictions are higher for the E/R minority due to labor market discrimination and the unemployment insurance benefits are determined v...
Saved in:
| Published in: | Journal of public economic theory Vol. 24; no. 2; pp. 348 - 361 |
|---|---|
| Main Authors: | , , |
| Format: | Journal Article |
| Language: | English |
| Published: |
Oxford
Blackwell Publishing Ltd
01-04-2022
|
| Subjects: | |
| Online Access: | Get full text |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | An increase in the salience of ethnic/racial (E/R) disputes often signifies a shift in the E/R status quo of a society. We present a labor market model where matching frictions are higher for the E/R minority due to labor market discrimination and the unemployment insurance benefits are determined via competitive elections. We hypothesize that a reduction in labor market discrimination, possibly because of its salience, shifts the unemployment from the minority to the majority, leading to a drop in the unemployment rate among the black minority, and consequently the unemployment insurance they receive. Nevertheless, the total unemployment insurance benefit may increase because the median voter, who is a member of the majority, prefers a higher level of unemployment insurance. To empirically test our hypothesis, we constructed a novel, news‐based, and time‐varying measure of E/R discrimination salience for the US and show that unemployment insurance benefits to the black minority decreases in response to an increase in our measure. |
|---|---|
| ISSN: | 1097-3923 1467-9779 |
| DOI: | 10.1111/jpet.12557 |