Becker's Taste-Based Discrimination Model

Definition

Becker's taste-based discrimination model is a theory that explains how individual prejudices and biases can lead to discrimination in the labor market. It suggests that employers, employees, or consumers may have a 'taste' or preference for discrimination against certain groups, which can result in unequal treatment and opportunities in the employment context.

5 Must Know Facts For Your Next Test

1. Becker's model assumes that individuals have a 'taste' or preference for discrimination, which manifests as a disutility or personal cost associated with interacting with members of a particular group.
2. Employers with a taste for discrimination will be willing to pay more to avoid hiring members of the discriminated group, effectively reducing the demand for their labor and leading to lower wages.
3. Customers or co-workers with a taste for discrimination can also contribute to labor market discrimination by preferring to interact with members of their own group, which can limit employment opportunities for the discriminated group.
4. The degree of discrimination in the labor market depends on the strength of the discriminatory tastes and the relative bargaining power of the discriminated group.
5. Becker's model suggests that competitive market forces can reduce discrimination over time, as employers who do not discriminate will have a cost advantage and can outcompete those with discriminatory tastes.

Review Questions

• Explain how Becker's taste-based discrimination model differs from statistical discrimination in the context of employment.
  • The key difference between Becker's taste-based discrimination model and statistical discrimination is the underlying reason for the discriminatory behavior. In Becker's model, discrimination arises from individual prejudices and biases, where employers, employees, or customers have a personal 'taste' or preference for discriminating against certain groups. This leads to a disutility or personal cost associated with interacting with members of the discriminated group, which can manifest as lower wages or limited employment opportunities. In contrast, statistical discrimination is based on employers using group averages and perceived characteristics to make decisions about individual applicants, rather than evaluating them solely on their own merits. Both forms of discrimination can result in unequal treatment in the labor market, but the mechanisms and underlying motivations differ.
• Analyze how the degree of discrimination in the labor market can be influenced by the relative bargaining power of the discriminated group according to Becker's model.
  • Becker's taste-based discrimination model suggests that the degree of discrimination in the labor market is influenced by the relative bargaining power of the discriminated group. If the discriminated group has greater bargaining power, such as access to alternative employment options or the ability to demand higher wages, this can reduce the impact of the employer's or customer's discriminatory tastes. Conversely, if the discriminated group has less bargaining power, perhaps due to a lack of alternative employment opportunities or a surplus of labor supply, then the employer's or customer's discriminatory tastes will have a greater effect, leading to more pronounced wage gaps and employment disparities. The model suggests that competitive market forces can help reduce discrimination over time, as employers who do not discriminate will have a cost advantage and can outcompete those with discriminatory tastes. However, the relative bargaining power of the discriminated group remains a key factor in determining the extent of discrimination in the labor market.
• Evaluate how Becker's taste-based discrimination model can be used to understand the phenomenon of occupational segregation in the labor market.
  • Becker's taste-based discrimination model can provide insights into the phenomenon of occupational segregation, where certain demographic groups are concentrated in specific occupations or industries. According to the model, if employers, employees, or customers have a 'taste' or preference for discrimination against particular groups, this can limit the employment opportunities available to those groups. Employers with discriminatory tastes may be less willing to hire members of the discriminated group, even if they are equally qualified, leading to their concentration in certain occupations. Similarly, co-workers or customers with a taste for discrimination may prefer to interact with members of their own group, further reinforcing occupational segregation. The model suggests that the degree of occupational segregation will depend on the strength of the discriminatory tastes and the relative bargaining power of the discriminated group. Over time, competitive market forces may help reduce occupational segregation, but the model highlights how individual biases and prejudices can perpetuate unequal access to employment opportunities and contribute to the persistence of occupational segregation in the labor market.

Related terms

Statistical Discrimination: A form of discrimination based on perceived group characteristics rather than individual merit, where employers use group averages to make decisions about individual applicants.

Monopsony Power: The market power that an employer has over its employees due to a lack of alternative employment options, which can lead to lower wages and less favorable working conditions.

Occupational Segregation: The concentration of certain demographic groups in specific occupations or industries, often due to discrimination or societal biases.