Answer: firms having imperfect information regarding the actual productivity or skill of a potential employee.
Explanation:
Statistical discrimination arises because firms have limited information about a prospective employee so they will base their productivity level on their race or gender based on the statistics relating to the productivity of their gender and/or race.
These statistics are usually based on historical discrimination that forced the members of the group to be less productive but these statistics are sometimes used anyway. For instance, a woman might be a prospective employee who will not be hired due to the belief that women would require more paid sick days off than men.
