Think of the idea explored by some researchers, summarized in Section 14.3.4, that increased competition through trade can reduce employment discrimination. Specifically, assume that some employers are prejudiced against women and are willing to give up some profit in order to avoid hiring them, agreeing to hire a woman only if the wage is sufficiently lower than a man's wage. On the other hand, if a firm is barely breaking even, an employer places a higher priority on making a profit and less on indulging his prejudices, and will be willing to hire more women. Assume that the industry in question is monopolistically competitive, and do the following two questions without math, following the economic logic of the models.
(a) Suppose that all employers are equally prejudiced, but as in the Melitz model discussed in Section 3.5, they differ in their productivity. Which firms do you think are going to be most willing to hire women in equilibrium? What will the equilibrium look like? How will international trade affect the pattern of discrimination?
(b) Now, answer the same question under the assumption that different employers are all equally productive but differ in their degree of prejudice, and consequently in their willingness to hire women. Explain how your answers change from the previous assumption, and why.