Selection Wages and Discrimination

17 Pages Posted: 18 Dec 2010

See all articles by Ekkehart Schlicht

Ekkehart Schlicht

University of Munich - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2009


Applicants for any given job are more or less suited to fill it, and the firm will select the best among them. Increasing the wage offer attracts more applicants and makes it possible to raise the hiring standard and improve the productivity of the staff. Wages that optimize on the trade-off between the wage level and the productivity of the workforce are known as selection wages. As men react more strongly to wage differ¬entials than females, the trade-off is more pronounced for men and a profitmaximizing firm will offer a higher wage for men than for women in equilibrium.

Keywords: Discrimination, selection wages, efficiency wages, hiring standards, monopsony, employment criteria, wage posting, Reder competition

JEL Classification: J31, J7, B54, D13, D42

Suggested Citation

Schlicht, Ekkehart, Selection Wages and Discrimination (2009). Economics Discussion Paper No. 2009-35, Available at SSRN: or

Ekkehart Schlicht (Contact Author)

University of Munich - Department of Economics ( email )

Ludwigstrasse 28
Munich, D-80539

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

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