Ethnic diversity, market structure and risk sharing in developing countries

Mohamed Jellal, Yves Zenou

Research output: Chapter in Book/Report/Conference proceedingChapter (Book)Researchpeer-review


The paper addresses mainly three questions. One, do workers tend to be employed by employers of the same ethnic group; two, what is the structure of the equilibrium wage contract; and three, do more ethnically homogeneous labor markets tend to have different labor contracts than more ethnically diversified ones. The answer to the first question is in the affirmative - in equilibrium all employers offer the same wage contract and workers are hired by employers of the closest ethnic affiliation. In terms of the equilibrium wage contract, its nature depends on the attitude toward risk of both sides of the market. Finally, the answer to the third question is also in the affirmative since the more homogenous the labor market, the more deterministic is the wage.

Original languageEnglish
Title of host publicationThe Economics of Immigration and Social Diversity
EditorsSolomon Polachek, Carmel Chiswick, Hillel Rapoport
Place of PublicationBingley UK
PublisherEmerald Group Publishing Limited
Number of pages30
ISBN (Electronic)9781849503907
ISBN (Print)0762312750, 9780762312757
Publication statusPublished - 27 Apr 2006
Externally publishedYes

Publication series

NameResearch in Labor Economics
ISSN (Print)0147-9121

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