The Economics of Discriminatory Job Reservations

A society reserves certain jobs for members of a politically dominant social group to maximize the wages of workers in that group. Through an appropriate choice of reserved jobs, the dominant group chooses both the size of the set of reserved jobs and the elasticity of substitution between reserved and unreserved jobs. Optimal discrimination endogenously creates categories of “good” and “bad” jobs and assigns workers from different social groups into these different categories. The relative scarcity of labor determines whether discrimination or free labor markets are optimal. I apply the model to apartheid South Africa and other discriminatory societies.

Publication Details

Journal
White Rose Research Online (University of Leeds, The University of Sheffield, University of York)
Published
2025-11-19
Primary Topic
Labor market dynamics and wage inequality
Type
article
Field-Weighted Citation Impact
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article

The Economics of Discriminatory Job Reservations

White Rose Research Online (University of Leeds, The University of Sheffield, University of York)
Labor market dynamics and wage inequality
article

The Economics of Discriminatory Job Reservations

article en

Abstract

A society reserves certain jobs for members of a politically dominant social group to maximize the wages of workers in that group. Through an appropriate choice of reserved jobs, the dominant group chooses both the size of the set of reserved jobs and the elasticity of substitution between reserved and unreserved jobs. Optimal discrimination endogenously creates categories of “good” and “bad” jobs and assigns workers from different social groups into these different categories. The relative scarcity of labor determines whether discrimination or free labor markets are optimal. I apply the model to apartheid South Africa and other discriminatory societies.

White Rose Research Online (University of Leeds, The University of Sheffield, University of York)
Reduced inequalities
Openalex Percentile: Top 24%
Labor market dynamics and wage inequality
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The Economics of Discriminatory Job Reservations · White Rose Research Online (University of Leeds, The University of Sheffield, University of York) (2025) | TGRS Research Map | TGRS