Handbook of Economics and Ethics
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Handbook of Economics and Ethics

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.
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Chapter 13: Discrimination

Deborah M. Figart


Deborah M. Figart Discrimination is usually defined as the act of treating ‘equals’ unequally. It therefore violates one formulation of Immanuel Kant’s categorical imperative that ‘equals should be treated equally’. Economic discrimination is unequal treatment based on group identity in labour markets, housing markets, education markets and other markets. As explored in detail below, such discrimination violates norms of commutative justice (fair exchange) and distributive justice (fair distribution of resources). Although discrimination can occur in a variety of markets, labour-market discrimination has received the bulk of economists’ attention. Labour-market discrimination occurs in hiring, promotion, conditions of work and wage-setting. Moreover, discrimination in one of these areas tends to have implications for others. For example, occupational segregation of men and women into different job categories is one of the causes of wage differentials. Wages, the most easily measured outcomes of labour-market discrimination, have been the primary focus of empirical research. Because wages are the primary means of provisioning in market economies, access to jobs paying relatively higher wages provides a degree of power and autonomy in the public sphere and within the household. Wage inequality therefore has implications for an individual’s ability to achieve a quality of life. Neoclassical theories of discrimination Economic definitions of discrimination generally derive from the basic framework of unequal treatment of equals. However, as Amartya Sen (1992, p. ix) cogently argued, the significant question in any discussion of inequality is ‘equality of what?’ For mainstream economic theories of discrimination, especially those grounded in neoclassical economics,...

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