Journal of Economics

, Volume 99, Issue 2, pp 141–171 | Cite as

Identification, screening and stereotyping in labour market discrimination

  • Maarten C. M. Vendrik
  • Christiane Schwieren
Open Access


According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing more reliance on stereotypic perceptions and prejudices, and hence more discrimination against an outgroup. We integrate both responses in a microeconomic model of hiring and pay decisions by an employer. Increasing competition in the product market makes the employer feel more uncertain about his profits, but also raises the opportunity cost of screening expenditures. This elicits substitution of ingroup identification for screening expenditures, and hence enhances discrimination.


Discrimination Stereotyping Social identity Uncertainty Screening 

JEL Classification

J7 M51 



For helpful discussions and comments we want to thank Lex Borghans, Lorne Carmichael, Giacomo Corneo, Frank Cörvers, Peter de Gijsel, Pablo Guillen Alvarez, Rein Haagsma, Georg Kirchsteiger, Doh Shin Jeon, Jörg Oechsler, Gerard Pfann, James Poterba, Erik de Regt, Arno Riedl, Robert Shimer, Jeroen van de Ven, Peter Wakker, Markus Walzl, Geert Woltjer, three anonymous referees, and the participants of the NAKE 2004 Research Day and the EEA 2005 conference in Amsterdam and seminars at Maastricht University and Utrecht University. We are also indebted to Maia Güell for kindly informing us about data sources and help with estimations.

Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.


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Copyright information

© The Author(s) 2009

Authors and Affiliations

  • Maarten C. M. Vendrik
    • 1
    • 2
  • Christiane Schwieren
    • 3
  1. 1.Maastricht UniversityMaastrichtThe Netherlands
  2. 2.IZABonnGermany
  3. 3.University of HeidelbergHeidelbergGermany

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