The Self-Fulfilling Discriminations and Mismatches for Old Workers and Poor Workers

Abstract

There exists very general discriminations and mismatches for the old workers and poor workers. This paper built a model to explain the reason of that phenomenon based on asymmetry information. A skilled worker may be mismatched with unimportant jobs because of the social bias towards old workers and poor workers, in that situation, the expense workers spend to become skilled will not be covered, which will be a big disincentive for workers to be skilled. The disincentive will lead to less skilled workers, so the working performance of certain kinds of workers in the whole society will be worse, which will confirm the discrimination. In that process, the expense to be skilled is a key factor. And we also try to use that model to explain some phenomena, such as East Asian miracle and class solidification.