This article appeals to heterogeneity in workers' non-wage preferences to model taste-based discrimination. Firms hire both types of workers and pay lower wages to minority workers, whatever their taste for discrimination. A single prejudiced firm in the market produces a substantial wage gap in...

This paper considers the "share-altering" technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a...