Discrimination, Taste For

BIBLIOGRAPHY

A person (an employer, coworker, or consumer) is said to have a taste for discrimination if he or she would pay to maintain social or psychological distance from members of a particular group. A related concept, nepotism, is used to describe a sacrifice of income to maintain proximity to members of a particular group. A taste for discrimination is, in this analysis, no different from having a taste (preference) or distaste for any market commodity. This approach to discrimination was first articulated in The Economics of Discrimination by economist Gary Becker. Since publication of this pioneering work in 1957, Becker’s analysis has become the dominant theory of discrimination within mainstream economics.

Becker claimed that the motivations behind discriminatory tastes were the province of sociologists and psychologists. His stated objective was to focus solely on the economic consequences of discriminatory preferences translated into economic behavior. He explicitly considered, however, the motivations to be nonpecuniary. According to Becker, one actually discriminates, as opposed to merely having a taste for discrimination, when one forfeits income in order to indulge this preference. The employer who hires desirable workers pays relatively higher wages and is content to do so. Costs of production increase and therefore diminish profits. Conversely, a nondiscriminating employer—should one exist—will hire the workers with the lowest market wages if they are no less productive than members of the desired group. According to Becker, uninhibited market forces should punish discriminators whose businesses are less profitable. If the industry is not competitive, however, employer discrimination may be able to persist for a longer time.

Customer discrimination, in contrast, is not subject to the same market discipline. So long as the customer is satisfied with paying to indulge his or her taste, the status quo can continue. Employees’ taste for discrimination manifests as a desire for higher wages to compensate for working alongside the undesired group. To avoid such costs, employers can segregate jobs.

The assumption that discrimination is not profitable has important policy implications. Mainstream economists have utilized Becker’s model to argue that market competition undermines discriminatory practices, and therefore antidiscrimination regulations are unnecessary. Persistent wage differentials are deemed to be due to productivity differences alone, rather than discrimination. In a 1998 review of empirical research in the Journal of Economic Perspectives, however, William Darity Jr. and Patrick Mason note that multiple methodologies have revealed ongoing discrimination. Similarly, Francine Blau and Lawrence Kahn (2000), in the same journal, summarize a range of studies on the gender pay gap and find ongoing evidence of discrimination despite women’s increased acquisition of human capital.

Theories that blur the boundaries between in-market and premarket discrimination, as well as those in which market power is viewed as a normal result of competitive processes, better explain why wage differentials can persist and be profitable, according to Darity and Mason. The core assumption of Becker’s model is that the preference to associate (or not associate) with people with specific ascriptive characteristics is exogenously given. Nonpecuniary motivations imply a lack of economic incentives to discriminate. This assumption has long troubled political economists focusing on institutionalized discrimination (D’Amico 1987). For political economists, discrimination is endogenous to economic processes (Mason 1995; Shulman 1996). First, employers benefit from discrimination via class struggle effects : by perpetuating divisions among social groups, discrimination “divides and conquers” the workforce by limiting worker organization. Second, exclusion effects or job competition effects imply that members of dominant groups who get preferential access to labor market queues have economic incentives to maintain these hierarchies.

Research by anthropologists, psychologists, and other social scientists indicates that race-ethnicity, sex-gender, and other social categories do not have intrinsic meaning apart from specific social contexts. The process of forming such identities is therefore complex. Treating discrimination as a “taste” presumes that the meanings of such ascriptive characteristics are generated outside of economic processes rather than examining how racial (or gender) identities become “productive property” (Darity et al. 2006, p. 302). Members of privileged groups develop property rights in their racial and gender identities, according to a game-theoretic model developed by Darity, Mason, and James Stewart (2006). In their model, as well as in the historical examples they cite, taking on a racialized identity, as opposed to an individualist mindset, garners concrete benefits. Such identities provide access to income and wealth for group members, making them intransigent over time. Their conception of identity contrasts with the primarily ideological and cultural depiction of identity in George Akerlof and Rachel Kranton (2000); their model discounts the prevalence of discrimination by emphasizing the voluntary choices made by women and others to eschew occupations and economic activities associated with dominant groups.

According to Deborah Figart and Ellen Mutari (2005), Becker’s focus on preferences for social distance draws upon the prevailing discourse about racial segregation in the 1950s United States, but it is not a universal theory of discrimination. Impersonal entities such as corporations, for example, do not have a desire for distance. Other forms of discrimination defined out of the scope of Becker’s analysis, including wage discrimination and statistical discrimination, have complex but different dynamics. In fact, forms of discrimination may evolve in response to changes in the political economy (see Darity and Mason 1998; Blau and Kahn 2000). Taste for discrimination, therefore, is at best a partial explanation of labor market practices.

SEE ALSO Discrimination; Discrimination, Racial; Discrimination, Statistical; Discrimination, Wage; Discrimination, Wage, by Age; Discrimination, Wage, by Gender; Discrimination, Wage, by Occupation; Discrimination, Wage, by Race

BIBLIOGRAPHY

Akerlof, George, and Rachel Kranton. 2000. Economics and Identity. Quarterly Journal of Economics 115 (3): 715–753.

Becker, Gary S. [1957] 1971. The Economics of Discrimination. 2nd ed. Chicago: University of Chicago Press.

Blau, Francine D., and Lawrence M. Kahn. 2000. Gender Differences in Pay. Journal of Economic Perspectives 14 (4): 75–99.

D’Amico, Thomas F. 1987. The Conceit of Labor Market Discrimination. American Economic Review 77 (2): 310–315.

Darity, William A., Jr., and Patrick L. Mason. 1998. Evidence on Discrimination in Employment: Codes of Color, Codes of Gender. Journal of Economic Perspectives 12 (2): 63–90.

Darity, William A., Jr., Patrick L. Mason, and James B. Stewart. 2006. The Economics of Identity: The Origin and Persistence of Racial Identity Norms. Journal of Economic Behavior & Organization 60 (3): 283–305.

Figart, Deborah M., and Ellen Mutari. 2005. Rereading Becker: Contextualizing the Development of Discrimination Theory. Journal of Economic Issues 39 (2): 475–483.

Mason, Patrick L. 1995. Race, Competition, and Differential Wages. Cambridge Journal of Economics 19 (4): 545–567.

Shulman, Steven. 1996. The Political Economy of Labor Market Discrimination: A Classroom-Friendly Presentation of the Theory. Review of Black Political Economy 24 (4): 47–64.

Ellen Mutari

Deborah M. Figart