Economic theory of statistical discrimination - Coursework Example

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According to Aigner and Cain, (1977), the statistical discrimination theory is a theory of inequality between different groups that do not arise from prejudice or racial and gender bias but from the stereotyping of the demographic group (p. 750-765). In the application of this…
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Economic theory of statistical discrimination
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Human Resource Management al Affiliation September 26, According to Aigner and Cain, (1977), the statistical discrimination theory is a theory of inequality between different groups that do not arise from prejudice or racial and gender bias but from the stereotyping of the demographic group (p. 750-765). In the application of this theory, people sharing identical characteristics may be treated differently if statistical decision makers were to be applied. This theory may be applicable in various fields. For instance if the employers in a given field do not understand or have not reviewed the workers abilities, they may end up making the wrong decisions.
On the other hand in unconscious bias theory, the employers may have a preconceived stereotype towards a certain group which may affect his/her decision making in situations such as giving promotions or pay rises. Such people have preconceived stereotypes when making decisions which object how they would make an unbiased decision. Such people may be trying to do otherwise but they will be affected by the unconscious bias while making decisions. As Wax, (2011) notes, unconscious bias plays a major role in social disparity by race and gender (p. 877).
These theories justify the need for anti-discriminatory laws and policies. It is important to help in the ruling of legal suits that have been filed against companies for discriminatory claims. The Employment Non-Discriminatory Act of 2007 is an important act in safeguarding the rights of employees against discrimination. I don’t feel there is any law or policy that should be done away with. Since managers are educated and they know how to handle the employees it is important to put in place strict measures to address cases of discrimination.
Aigner, D. J. and Cain, G. (1977). Statistical Theories of Discrimination in Labor Markets. Journal of Industrial and Labor Relations Review. (30), p. 750-765.
Wax, A. L. (2011). Supply Side or Discrimination? Assessing the Role of Unconscious Bias. Vol. 83, p. 877. Read More
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