On the labor market effects of salience of ethnic/racial disputes
Document Type
Article
Source of Publication
Journal of Public Economic Theory
Publication Date
1-1-2021
Abstract
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.
DOI Link
ISSN
Publisher
Wiley
Disciplines
Business
Scopus ID
Recommended Citation
Aköz, K. Kıvanç; Arın, K. Peren; and Zenker, Christina, "On the labor market effects of salience of ethnic/racial disputes" (2021). All Works. 4668.
https://zuscholars.zu.ac.ae/works/4668
Indexed in Scopus
yes
Open Access
no
