Statistical Discrimination Economic Theory, Structural Unemployment - Assignment Example

The paper "Statistical Discrimination Economic Theory, Structural Unemployment " is an outstanding example of a macro & microeconomics assignment. Statistical discrimination is an economic theory that explains discrimination or prejudices perpetuated by gender or racial inequality based on stereotypes (Ashenfelter & Rees, 2015). The phenomenon occurs when people or organizations make distinctions between certain demographic groups based on what one may describe as real or imagined statistical distinctions between the groups. The pioneers of the theory are Kenneth Arrow and Edmund Phillips, who posit that where there is a lack of knowledge or information on a certain fact or ability, one would substitute group averages (Ashenfelter & Rees, 2015).

If there is a difference between groups, the discriminators may use the group identity for screening. Statistical discrimination is more present when the group distributions are closer.

Occupational segregation is the distribution of people within and across jobs based on certain visible demographic characteristics (Ashenfelter & Rees, 2015). According to the author, these may include gender or race. The concept owes its origin to the work of Barbara Bergman, who was the first to propose it in 1974 (Ashenfelter & Rees, 2015). According to her, it could lead to male and female jobs or job categories based on other considerations such as race. For example, women tend to occupy pink-collar jobs concentrated in the office such as administrative support and service occupations. On the other hand, men assume the blue-collar roles that may be more mechanical in nature and require more manual work (Ashenfelter & Rees, 2015).

The segregation index is a summary measure used to characterize the overall level of segregation. It captures several aspects that cover how organizations discriminate against their workers. First, it gives a comparison of the degree of segregation over time. That tracks how well organizations perform when it comes to ensuring that they afford their employee's equal treatment and avoid discriminative practices at the workplace. The index also tracks how different countries fair and the treatment that workers receive across boundaries. That is important in determining the best countries to work in and the ones that may not be as welcoming.