@TechReport{iza:izadps:dp10291, author={Salamanca, Nicolás and Feld, Jan}, title={A Short Note on Discrimination and Favoritism in the Labor Market}, year={2016}, month={Oct}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={10291}, url={https://www.iza.org/publications/dp10291}, abstract={We extend Becker's model of discrimination by allowing firms to have discriminatory and favoring preferences simultaneously. We draw the two-preference parallel for the marginal firm, illustrate the implications for wage differentials, and consider the implied long-run equilibrium. In the short-run, wage differentials depend on relative preferences. However, in the long-run, market forces drive out discriminatory but not favoring firms.}, keywords={firm preferences;nepotism;wage gap;long-run equilibrium}, }