Equal Opportunity Policies

Today’s Reading• Schiller Ch. 16-Equal Opportunity Policies • DeParle, Raising Kevion

•http://www.jasondeparle.com/NYTMagazine_082204.html •http://www.pbs.org/newshour/bb/economy/jan-june05/welfare_4-21.html#

Today’s Topics

• What is racial discrimination?

• How can we identify discrimination as the cause of racial disparities?

• What policies have been implemented to reduce discrimination?

• Have these policies been effective?

Today’s Sources

• Roberta Spalter-Roth and Terri Ann Lowenthal, “Race, Ethnicity, and the American Labor Market: What’s at Work?” American Sociological Association Series on How Race and Ethnicity Matter, June 2005http://www2.asanet.org/centennial/race_ethnicity_labormarket.pdf

• National Academy of Sciences, Measuring Racial Discrimination (2004), http://www.nap.edu/books/0309091268/html/

• Isabel Sawhill and Daniel McMurrer, American Dreams and Discontents: Beyond the Level Playing Field, The Urban Institute http://www.urban.org/publications/306773.html

Examples of Racial Disparities

• Labor Markets– Wages– Employment and unemployment– Occupational distribution

• Criminal Justice• Education• Health Care• Housing/Mortgage Lending

Source: Spatler-Roth and Lowenthal, 2005

Source: Spatler-Roth and Lowenthal, 2005

Source: Spatler-Roth and Lowenthal, 2005

What is racial discrimination?

• Differential treatment on the basis of race that disadvantages a racial group, – a person is not hired for a job because of his or her race

• Treatment on the basis of inadequately justified factors other than race that disadvantages a racial group– An employer uses a test in selecting job applicants that

is not a good predictor of performance and results in proportionately fewer job offers being extended to members of disadvantaged racial groups compared with whites

Source:National Academy of Sciences, 2004

Measuring racial discrimination

• “ Although there is substantial direct empirical evidence for the prevalence of large disparities among racial and ethnic groups in various domains, it is often difficult to obtain direct evidence of whether and to what extent discrimination may be a contributing factor.” (National Academy of Sciences, p. 16)

Measuring racial discrimination, cont.

• Racial disparities ≠ discrimination• Other factors may contribute to racial

differences– Family composition and socioeconomic status– Pace of economic growth– the changing structure of industry– globalization of markets– Barriers to educational opportunities

Measuring racial discrimination, cont.

• Conclusion: • No single approach suitable for all the

important issues. • Look for consistent patterns of results across

studies • Public and private agencies should embrace

and fund a multidisciplinary, multi-method approach (National Academy of Sciences, pp. 5-6)

Answering the Counterfactual Question

•What would have happened to a nonwhite individual if he or she had been white? (NAS, p. 5)

–Infer the presence of discrimination by determining whether an observed adverse outcome for an individual would have been different had the individual been of a different race.

Four Major Methods of Measuring Discrimination

1. Statistical analysis of observational data and natural experiments

2. Laboratory experiments

3. Field experiments (audits)

4. analysis of survey and administrative record reports

1. Statistical analysisDecomposition of wage differentials

REVIEW• What portion of the wage gap is due to human

capital factors, i.e., due to differences in productivity?• Look for differences in

– education – training, and

– experience. • The portion of the wage gap not explained by these

differences is attributed to discrimination.

Statistical analysis, cont.

White-Black Wage Gap

• How much of the White-Black wage gap is explained by decomposition of wage differentials?– Hyclak et al.: none – Schiller: one-fourth (p. 194).

• This implies that human capital (productivity) differences explain 75-100% of the Black/White wage gap.

Statistical analysis, cont.

Limitations

• Statistical decomposition is a valuable tool but, – Number of explanatory variables is limited– Does not accurately measure the portion of

differences due to current discrimination (NAS, p. 8)

2. Laboratory Experiments Definition

• A stimulus administered to research participants in a controlled environment

• Participants are randomly assigned to an experimental condition or another (e.g., control)

• Employ the gold standard of evaluation– “Experiments come closest to addressing

the counterfactual question.” (NAS, p. 6)

Laboratory Experiments, cont. Advantages

• Can identify – those situations in which discriminatory attitudes

and behaviors are more or less likely to occur, – the characteristics of people who are more or less

likely to exhibit discriminatory attitudes and behaviors, and

• Provides– models of people’s mental processes that may

lead to racial discrimination. (NAS, p.6)

Laboratory Experiments, cont. Advantages

• Results provide the theoretical basis for more accurate and complete statistical models of racial discrimination.

• Results can be tested with in real-word settings with real-world data. (NAS, p. 6)

Laboratory Experiments, cont.Limitations

• Laboratory experiments cannot address directly how much race-based discrimination contributes to adverse outcomes for those groups in society at large. (NAS, p. 6)

3. Field Experiments (Audits)

Definition• Large-scale experiments in real-world settings • Random assignment of subjects to one or more

experimental treatments or to no treatment• Otherwise comparable pairs of, say, a black

person and a white person sent separately into the market– housing, specifically seeking new apartments or

houses. – job seeking

Field Experiments (Audits), cont.

Advantages

– their results can be generalized more readily to the population at large.

Field Experiments (Audits), cont.

Limitations

• Take longer • More complex to manage • More costly to conduct than laboratory

experiments• Their results are more easily confounded by

factors in the environment that the researchers cannot control.

4. Indicators of Discrimination from Surveys and Administrative

Records Definition

• Self-reports of racial attitudes and perceived experiences of discrimination in surveys

• Reports of discriminatory events in administrative records

Indicators of Discrimination from Surveys and Administrative Records, cont.

Advantages

• Longitudinal and repeated cross-sectional data – illuminate trends and changes in patterns of

racially discriminatory • attitudes and • behaviors

– Allow identification of cumulative disadvantage. (NAS, p. 9)

Indicators of Discrimination from Surveys and Administrative Records, cont.

Limitations

• Survey data measure reports of perceived discrimination

• Goal is to measure the prevalence of actual discrimination (NAS, p. 9)

NAS Recommendations

Public and private funding agencies and researchers should increase funding for all four methods of measuring discrimination!

Past and Current Policies to Combat Market Discrimination

• Executive orders and legislation designed to guarantee equal employment opportunity policies – Office of Federal Contract Compliance Programs

(OFCCP)– Equal Employment Opportunity Commission

(EEOC)

• Affirmative action such as quotas and guidelines

Effectiveness of Equal Employment and Equal Education Policies

Important questions• Do these policies achieve their goals?• Do their costs outweigh their benefits?

– What is the opportunity cost of affirmative action? • Do we get the biggest bang for our buck? Are they

the best remedy? • Will they perform in the future as in the past?• Should their use be increased? Is their relationship

with employment linear? nonlinear?

Results of Evaluations

• Local goals – Jonathan Leonard: minority employment has risen as a

direct and indirect result of affirmative action initiatives. (Schiller, p. 277)

• Global goals – eliminating discrimination reduction in inequality– winners and losers reshuffled – Changing the rules governing the competition of wealth and

status does nothing to change the structure of the market economy and the rewards that flow from it.

(Source: Sawhill and McMurrer, http://www.urban.org/publications/306773.html )

Are there new policies we should consider?

• Reduce discrimination?– Class-based affirmative action?– Others?

• Increase educational access?• Offset or compensate for the effects of

globalization?• Alter the structure of industry so as to increase

opportunities for all?• Increase the rate of economic growth?• Stabilize families?