DISCRIMINATION AND THE UNEMPLOYMENT DURATIONS OF WHITE AND BLACK-MALES

In this study we develop a model to decompose the longer unemployment duration of blacks into discriminatory and non-discriminatory componen ts. By extending Becker's theory of discrimination to job-search theor y, the discriminatory component is seen to be the result of two separa te effects. First, a white treatment advantage shortens the unemployme nt duration of whites because they receive more frequent and higher wa ge offers than would prevail in the absence of discrimination for work ing alongside blacks. Second, a black treatment disadvantage lengthens the jobless spell of blacks because blacks receive lower wage offers than would prevail without discrimination as discriminating employers extract quasi-rents from their labour. We estimate our model using dat a from the CPS Displaced Workers Survey. The results show that 3.81 of the 4.58 weeks longer unemployment spell for blacks is due to discrim ination, with 3.11 weeks resulting from the white treatment advantage, and 0.7 weeks emanating from the black treatment disadvantage.