Discrimination in labor markets can occur based on age, gender, ethnicity, or disability. Wage discrimination is a common form, where workers are paid differently for the same job. For discrimination to be effective, employers need some wage-setting power, the ability to identify different groups of workers, different price elasticities of supply for these groups, and no opportunity for labor reselling. Discrimination in labor markets leads to an inefficient allocation of resources, as the demand curve for labor is in the wrong place. This can result in favored groups being overvalued and discriminated groups being undervalued. The economic impacts include reduced labor supply, lower productivity, and wasted resources. While some workers may benefit from discrimination, the overall negative effects on the economy outweigh any potential benefits for employers. Discrimination in labor markets is an irrational decision that worsens outcomes and reduces total output.