ERIC Number: ED147385
Record Type: RIE
Publication Date: 1976-Mar
Reference Count: 0
The Labor Market Implications of an Economy-Wide Affirmative Action Program.
Johnson, George E.; Welch, Finis
The purpose of this paper is to investigate the potential impact, on the distribution of labor income, of a policy that requires that in each firm minority workers: (1) receive the same wages as majority workers given the same job classifications and, (2) are employed in the same proportion as majority workers in all job classifications. This analysis is directed to the question of the maximum potential of affirmative action policies. Given that Affirmative Action Policies (AAP) have two principle provisions (equal pay for equal work, and mandatory hiring in each firm of minority workers to fill at least a specified fraction of skilled positions), the effects of the policy will depend on the size of the quota relative to the number of skilled minority workers in the economy, the degree to which the minority groups suffer labor market discrimination, and the nature of the way firms react to the new environment. Three different situations are explained: what happens when the quotas are set just equal to the supply of skilled workers, when quotas are set at less than the supply of skilled workers. In the remainder of the paper the implications of AAP for a number of special cases are investigated. For each case, a numerical model of income differences between the races is used. In the last section a model of heterogeneous labor is employed to investigate the potential impact of AAP on the incentives for minority and majority labor to acquire skills. (Author/AM)
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Rand Corp., Santa Monica, CA.