Document Type
Discussion Paper
Publication Date
6-1-1984
CFDP Number
708R
CFDP Revision Date
1985-06-01
CFDP Pages
42
Abstract
The Invisibility Hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers, but that promotion enhances visibility and alleviates this problem. Then, at a competitive labor market equilibrium, firms profit by hiding talented disadvantaged workers in low level jobs. Consequently, those workers are paid less on average and promoted less often than others with the same education and ability. As a result of the inefficient and discriminatory wage and promotion policies, disadvantaged workers experience lower returns to investments in human capital than other workers.
Recommended Citation
Milgrom, Paul R. and Oster, Sharon, "Job Discrimination, Market Forces and the Invisibility Hypothesis" (1984). Cowles Foundation Discussion Papers. 943.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/943