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How Do Economists Think About How Do Economists Think About and Study Discrimination?and Study Discrimination?
David NeumarkDavid Neumark
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Why do economists study discrimination? Why do economists study discrimination?
Motivated by persistent differences between Motivated by persistent differences between economic outcomes for different groupseconomic outcomes for different groups
– Wage, employment, and unemployment Wage, employment, and unemployment differences by racedifferences by race
– Wage and employment differences by sexWage and employment differences by sex
– Longer unemployment durations of older workersLonger unemployment durations of older workers
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Example of disparities in economic outcomes: Example of disparities in economic outcomes: race differences in unemployment race differences in unemployment
Go to Go to http://www.bls.gov/cps/home.htmhttp://www.bls.gov/cps/home.htm– Click on “Most Requested Statistics”Click on “Most Requested Statistics”– Select “Labor Force Statistics from the Current Population Survey”Select “Labor Force Statistics from the Current Population Survey”– Select “Unemployment Rate – White” and “Unemployment Rate – Black Select “Unemployment Rate – White” and “Unemployment Rate – Black
or African American”or African American”– For January 2008, we get the followingFor January 2008, we get the following
Black men, Black men, aged 16+aged 16+
White men, White men, aged 16+aged 16+
Unemployment rateUnemployment rate 9.2%9.2% 4.4%4.4%
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Example of disparities in economic outcomes: Example of disparities in economic outcomes: sex differences in earningssex differences in earnings
Go to Go to http://www.bls.gov/cps/home.htmhttp://www.bls.gov/cps/home.htm– Click on “Most Requested Statistics” Click on “Most Requested Statistics” – Select “Weekly and hourly earnings data from the Current Population Select “Weekly and hourly earnings data from the Current Population
Survey” Select “Median wkly earnings, Emp FT, Wage & sal wrkrs, Survey” Select “Median wkly earnings, Emp FT, Wage & sal wrkrs, White, Men” and “Median wkly earnings, Emp FT, Wage & sal wrkrs, White, Men” and “Median wkly earnings, Emp FT, Wage & sal wrkrs, White, Women”White, Women”
– For 4For 4thth quarter of 2007, we get the following quarter of 2007, we get the following
White womenWhite women White menWhite men
Median weekly earningsMedian weekly earnings $632$632 $800$800
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Other examples of disparities in economic Other examples of disparities in economic outcomesoutcomes
From same website, with further exploration, can find the followingFrom same website, with further exploration, can find the following
Black menBlack men White menWhite men
Median weekly earnings Median weekly earnings (full-time, Q4: 2007)(full-time, Q4: 2007)
$599$599 $800$800
Employment/population Employment/population ratio (Jan. 2008)ratio (Jan. 2008)
60.8%60.8% 70.6%70.6%
White womenWhite women White menWhite men
Employment/population Employment/population ratio (Jan. 2008)ratio (Jan. 2008)
56.7%56.7% 70.6%70.6%
Men aged 55-Men aged 55-6464
Men aged Men aged 25-3425-34
Mean unemployment Mean unemployment duration (2007)duration (2007)
23.4 weeks23.4 weeks 16.4 weeks16.4 weeks
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Differences in economic outcomes are impetus Differences in economic outcomes are impetus for broad research agenda on discriminationfor broad research agenda on discrimination
These empirical regularities lead to goal of understanding These empirical regularities lead to goal of understanding contribution of discrimination to these differencescontribution of discrimination to these differences
– Definition of “discrimination”Definition of “discrimination”
• People rewarded differently based on demographic People rewarded differently based on demographic characteristics independent of their actual productivitycharacteristics independent of their actual productivity
– Helps parse differences into those driven by treatment in Helps parse differences into those driven by treatment in labor market and those driven by pre-market factorslabor market and those driven by pre-market factors
• This, in turn, tells us where policies can most effectively This, in turn, tells us where policies can most effectively intervene to try to reduce differences in economic intervene to try to reduce differences in economic outcomesoutcomes
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Numerous policy questions also ariseNumerous policy questions also arise
Of course policy questions go quite a bit deeperOf course policy questions go quite a bit deeper– If there is discrimination, then what is the If there is discrimination, then what is the
appropriate policy response? appropriate policy response? – Have the policies in place reduced discrimination, Have the policies in place reduced discrimination,
and do they continue to do so? In what ways do and do they continue to do so? In what ways do they fail to be effective? they fail to be effective?
– Do they create other problems or even lead to Do they create other problems or even lead to unintended consequencesunintended consequences and harm the groups and harm the groups they are trying to help?they are trying to help?
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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““Workhorse” model: discrimination reflects Workhorse” model: discrimination reflects tastestastes
Economics differs from other social sciences in not trying to Economics differs from other social sciences in not trying to explainexplain tastes, but to understand how they play out in markets tastes, but to understand how they play out in markets– Becker’s modelsBecker’s models
• ““Employer discrimination”Employer discrimination”– Employers dislike interacting with workers in some Employers dislike interacting with workers in some
group, and therefore act “as if” they are less group, and therefore act “as if” they are less productiveproductive
• ““Employee discrimination”Employee discrimination”– Some workers dislike working with other workers, Some workers dislike working with other workers,
and need to be compensated (like bad working and need to be compensated (like bad working condition)condition)
• ““Customer discrimination”Customer discrimination”– Customers dislike interacting with workers from some Customers dislike interacting with workers from some
group, which effectively lowers their productivitygroup, which effectively lowers their productivity
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Implications of taste-based discrimination Implications of taste-based discrimination modelsmodels
Employer discriminationEmployer discrimination– Lower wages for groups suffering discrimination, controlling Lower wages for groups suffering discrimination, controlling
(accounting) for (accounting) for actualactual productivity differences productivity differences– Lower employment/less hiring for groups suffering Lower employment/less hiring for groups suffering
discrimination, accounting for other differencesdiscrimination, accounting for other differences• Especially when we have laws regulating wages Especially when we have laws regulating wages
– Competition might root out such discrimination, but only Competition might root out such discrimination, but only under some conditionsunder some conditions
Employee discrimination: segregated workplaces, lower Employee discrimination: segregated workplaces, lower employment/less hiringemployment/less hiring
Customer discrimination: wage differences, lower Customer discrimination: wage differences, lower employment/less hiringemployment/less hiring
Implications for how economists test for discrimination in labor Implications for how economists test for discrimination in labor marketsmarkets
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Past discrimination and public policy response Past discrimination and public policy response
Little debate about whether there was discrimination in the pastLittle debate about whether there was discrimination in the past– Jim Crow (into 1950s or 60s)Jim Crow (into 1950s or 60s)– Marriage bars through the 1950, extensive through early Marriage bars through the 1950, extensive through early
1940s1940s• Most school districts barred married women from Most school districts barred married women from
teaching, and many large firms barred them from clerical teaching, and many large firms barred them from clerical jobsjobs
• Earlier prohibitions on training women as doctors or Earlier prohibitions on training women as doctors or lawyerslawyers– Fun fact: Only outlawed in Japan in 1985Fun fact: Only outlawed in Japan in 1985
– Explicit age limits in job advertisements (1950s and 60s) Explicit age limits in job advertisements (1950s and 60s)
Considerably more debate about how pervasive labor market Considerably more debate about how pervasive labor market discrimination remains today, and more generally in post-Civil discrimination remains today, and more generally in post-Civil Rights periodRights period
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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Overview of anti-discrimination policies (I)Overview of anti-discrimination policies (I)
Equal Pay Act of 1963Equal Pay Act of 1963
– Requires equal pay for equal workRequires equal pay for equal work
Title VII of Civil Rights Act of 1964Title VII of Civil Rights Act of 1964
– Made it illegal to use race, sex, ethnicity as basis Made it illegal to use race, sex, ethnicity as basis for labor market decisions regarding hiring, pay, for labor market decisions regarding hiring, pay, conditions, etc.conditions, etc.
• Part of larger Act covering voters’ rights, public Part of larger Act covering voters’ rights, public accommodations, school desegregation, sex accommodations, school desegregation, sex discrimination in education discrimination in education
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Overview of anti-discrimination policies (II)Overview of anti-discrimination policies (II)
Affirmative ActionAffirmative Action
– Not established by legislation, but by Executive Not established by legislation, but by Executive Orders regulating companies doing business with Orders regulating companies doing business with federal gov’tfederal gov’t
– Affirmative Action in university admissions is Affirmative Action in university admissions is something schools have chosen to do; policy something schools have chosen to do; policy question is whether to ban it question is whether to ban it
Age Discrimination in Employment Act of 1967Age Discrimination in Employment Act of 1967
– Lower profile, but likely to becoming very Lower profile, but likely to becoming very important with population agingimportant with population aging
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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Did anti-discrimination policies improve Did anti-discrimination policies improve outcomes for “protected groups”? (I)outcomes for “protected groups”? (I)
Most of this research focuses on effects of Title VII on black-white Most of this research focuses on effects of Title VII on black-white differences (e.g., Freeman, 1973)differences (e.g., Freeman, 1973)
‘‘6464
Hard to determine effect of federal legislation from single time-seriesHard to determine effect of federal legislation from single time-series
– If we pass a law covering everyone, and then we see a change in If we pass a law covering everyone, and then we see a change in behavior, how do we know it was the effect of the law rather than behavior, how do we know it was the effect of the law rather than something else changingsomething else changing
– Valuable lesson regarding drawing policy conclusions from dataValuable lesson regarding drawing policy conclusions from data
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Did anti-discrimination policies improve Did anti-discrimination policies improve outcomes for “protected groups”? (II)outcomes for “protected groups”? (II)
Research tends to conclude that federal laws led to a “break in the Research tends to conclude that federal laws led to a “break in the trend” and faster improvement of blacks’ relative economic trend” and faster improvement of blacks’ relative economic positionposition
Similar conclusion from other studies that try to better establish Similar conclusion from other studies that try to better establish “causal effects” of policy using richer variation“causal effects” of policy using richer variation– Earlier state laws implemented at different timesEarlier state laws implemented at different times– Interaction of state and federal laws that led to different Interaction of state and federal laws that led to different
businesses becoming bound by anti-discrimination laws at businesses becoming bound by anti-discrimination laws at different timesdifferent times
One important exceptionOne important exception– Laws protecting women focused on equal pay, which pushed up Laws protecting women focused on equal pay, which pushed up
cost without affording other protectioncost without affording other protection– ““Unintended consequence” of lowering their employmentUnintended consequence” of lowering their employment
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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Is discrimination still with us?Is discrimination still with us?
Motivated by alternative viewsMotivated by alternative views
– Anti-discrimination policies have acted to remove Anti-discrimination policies have acted to remove prejudices that led to discrimination in the past, prejudices that led to discrimination in the past, so policies are no longer neededso policies are no longer needed
– Discrimination still exists and we still need Discrimination still exists and we still need policies to root it outpolicies to root it out
• Even if laws effective, we wouldn’t expect laws Even if laws effective, we wouldn’t expect laws prohibiting discrimination to be completely prohibiting discrimination to be completely effectiveeffective
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Bulk of research literature focuses on wage Bulk of research literature focuses on wage discriminationdiscrimination
Building on Becker employer discrimination model, Building on Becker employer discrimination model, is there evidence that blacks or women are paid less is there evidence that blacks or women are paid less “controlling” for productivity differences that might “controlling” for productivity differences that might also explain pay differences?also explain pay differences?
– What do we mean when we say “controlling for”?What do we mean when we say “controlling for”?
• If higher paid group also has higher skills, then If higher paid group also has higher skills, then in estimating in estimating labor marketlabor market discrimination, we discrimination, we want to net out the effect of higher skillswant to net out the effect of higher skills
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What do we mean by “controlling for”?What do we mean by “controlling for”?
WagesWages
Prod.Prod.
Avg. WAvg. W
Avg. WAvg. W
Avg. SAvg. S Avg. SAvg. S
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What do we mean by “controlling for”?What do we mean by “controlling for”?
WagesWages
Prod. Prod.
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What do we mean by “controlling for”?What do we mean by “controlling for”?
WagesWages
Prod.Prod.
Wage difference between blacks Wage difference between blacks and whites at the same and whites at the same educational level, or “controlling educational level, or “controlling for education”for education”
““Raw” Raw” wage wage differencedifference
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Testing for wage discrimination (I)Testing for wage discrimination (I)
In general some share of the lower wages of blacks or women In general some share of the lower wages of blacks or women (or lower employment) is explained by other factors, but some (or lower employment) is explained by other factors, but some share also remains unexplained after controlling for differences share also remains unexplained after controlling for differences in proxies for productivityin proxies for productivity
Limitation faced by most research is we don’t have actual Limitation faced by most research is we don’t have actual productivity measuresproductivity measures
– Economists typically have access to data on “proxies” for Economists typically have access to data on “proxies” for productivity productivity
• Schooling, experience, job tenure, trainingSchooling, experience, job tenure, training
• Other personal characteristics that might or might not be Other personal characteristics that might or might not be productivity relatedproductivity related
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Testing for wage discrimination (I)Testing for wage discrimination (I)
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Testing for wage discrimination (II)Testing for wage discrimination (II)
Debate over this study helped to clarify that what economists are Debate over this study helped to clarify that what economists are studying is discrimination studying is discrimination in the labor marketin the labor market
– Still present, at least for men, based on this evidenceStill present, at least for men, based on this evidence
– But large part of problem may also be differences formed But large part of problem may also be differences formed before different groups get to the labor market, which may before different groups get to the labor market, which may reflect discrimination of other varietiesreflect discrimination of other varieties
Without actual productivity measures, left with endless arguments Without actual productivity measures, left with endless arguments about whether regressions like these capture productivity-related about whether regressions like these capture productivity-related differences, or whether remaining gaps by sex, race, etc., reflect differences, or whether remaining gaps by sex, race, etc., reflect unmeasured differences unmeasured differences
– E.g., allocation of effort, school quality E.g., allocation of effort, school quality
– Conclusions therefore closer to religion than science—answers Conclusions therefore closer to religion than science—answers depend more on beliefs than evidencedepend more on beliefs than evidence
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Testing for wage discrimination (III)Testing for wage discrimination (III)
There are contexts where we can get somewhat There are contexts where we can get somewhat furtherfurther
– Prime example is statistical analysis of company Prime example is statistical analysis of company level data sets, most often in court caseslevel data sets, most often in court cases
– These data sets often contain performance or These data sets often contain performance or productivity measures, and they are the ones the productivity measures, and they are the ones the company uses in its own personnel decisionscompany uses in its own personnel decisions
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Alternative tests for discrimination Alternative tests for discrimination
Special contexts in which we can’t measure individual Special contexts in which we can’t measure individual productivity, but can estimate productivity differences across productivity, but can estimate productivity differences across groups, and compare with wage differencesgroups, and compare with wage differences
– Research with Hellerstein and others, for the manufacturing Research with Hellerstein and others, for the manufacturing sector, finds that women are a bit less productive than men, sector, finds that women are a bit less productive than men, but the pay gap is much bigger, suggesting wage but the pay gap is much bigger, suggesting wage discriminationdiscrimination
Alternative is to be more “experimental,” creating fake job Alternative is to be more “experimental,” creating fake job applicants that applicants that areare identical except with respect to race or sex identical except with respect to race or sex
– ““Audit” or “correspondence” studiesAudit” or “correspondence” studies
– These studies generally provide evidence of discriminationThese studies generally provide evidence of discrimination—but these studies focus mainly on hiring, not pay—but these studies focus mainly on hiring, not pay
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Evidence from audit studies, exampleEvidence from audit studies, example In 1996 study, we tested for hiring discrimination against In 1996 study, we tested for hiring discrimination against
women in very expensive restaurants in Philadelphia (joint women in very expensive restaurants in Philadelphia (joint project with undergrads)project with undergrads)
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Evidence from audit studies, exampleEvidence from audit studies, example
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Evidence from audit studies, exampleEvidence from audit studies, example
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What about age discrimination?What about age discrimination?
I’ve said a lot less, because there is less evidenceI’ve said a lot less, because there is less evidence
– The The prima facieprima facie case is weaker than for race or sex, since case is weaker than for race or sex, since older workers on average earn more, rather than less, than older workers on average earn more, rather than less, than reference group, and also have high employment ratesreference group, and also have high employment rates
• I did, though, note longer unemployment durations for I did, though, note longer unemployment durations for older individuals, pointing to more difficulty in finding older individuals, pointing to more difficulty in finding new jobsnew jobs
– Yet if we look at enforcement activity, we might conclude Yet if we look at enforcement activity, we might conclude that age discrimination is extensivethat age discrimination is extensive
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What about age discrimination? (Charges filed What about age discrimination? (Charges filed with EEOC)with EEOC)
Totala ADEA ADA Title VII
(1) (2) (3) (4)
Total allegationsb 143,686 22,931 23,708 96,070
Issues alleged (percent)c
Benefits .9 1.5 1.4 .7
Demotion 1.8 2.7 1.4 1.7
Discharge 31.6 36.8 35.9 29.5
Discipline 5.3 4.8 4.1 5.7
Harassment 16.1 8.6 8.0 20.0
Hiring 4.2 8.4 4.9 3.1
Layoff 1.6 3.6 1.7 1.2
Promotion 4.6 6.0 1.7 5.0
Reasonable accommodation 3.3 18.3 .5
Retirement-involuntary .2 .6 .2 .04
Severance pay denied .05 .1 .08 .03
Terms/conditions 13.1 12.4 9.3 14.3
Wages 4.1 3.3 1.3 4.2
Waivers .09 .15 .13 .06
Other 13.1 11.2 11.6 14.0
Discharge + layoff 33.2 40.4 37.6 30.7
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What about age discrimination? (EEOC What about age discrimination? (EEOC litigation)litigation)
Bases allegeda
Total Age Disability Race Sex
(1) (2) (3) (4) (5)
Benefits 5 4
Demotion 9 3 1 2
Discharge 239 24 28 32 61
Discipline 15 1 2 5
Harassment 160 7 37 105
Hiring 50 10 10 7 20
Layoff 14 4 3 6
Promotion 22 5 2 10 5
Reasonable accommodation 29 19
Retirement-involuntary 2 2
Severance pay denied 1 1
Terms/conditions 33 4 12 13
Wages 13 5
Waivers 3 1 7
Other 39 3 9 6
Discharge + layoff % 66% 65% 57% 43% 37%
Hiring % 13% 23% 20% 9% 11%
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Evidence on age discriminationEvidence on age discrimination
My work finds that much of the problem in past decades was My work finds that much of the problem in past decades was discharge of older workers, breaking of what economists call discharge of older workers, breaking of what economists call “implicit contracts” that ask for long-term commitment from “implicit contracts” that ask for long-term commitment from workers, with higher pay at older ages as rewardworkers, with higher pay at older ages as reward
– Consistent with large share of discharge/layoff casesConsistent with large share of discharge/layoff cases
But the EEOC litigation statistics also point to age But the EEOC litigation statistics also point to age discrimination in hiringdiscrimination in hiring
– Harder to establish with audit studies, but evidence points Harder to establish with audit studies, but evidence points to hiring discriminationto hiring discrimination
– Likely to become increasing problem as share of population Likely to become increasing problem as share of population aged 65+ increases, and many look for part-time or new jobs aged 65+ increases, and many look for part-time or new jobs after leaving long-term careerafter leaving long-term career
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OutlineOutline
How do economists think about labor market How do economists think about labor market discrimination?discrimination?
What have been the policy responses?What have been the policy responses?
Did the anti-discrimination laws help reduce Did the anti-discrimination laws help reduce discrimination?discrimination?
Is discrimination still with us?Is discrimination still with us?
What are the contemporaneous effects of anti-What are the contemporaneous effects of anti-discrimination policies?discrimination policies?
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Contemporaneous debates about anti-Contemporaneous debates about anti-discrimination policiesdiscrimination policies
Discussion of age discrimination in hiring, and our Discussion of age discrimination in hiring, and our quick look at statistics on enforcement activity, is a quick look at statistics on enforcement activity, is a good segue into brief discussion of current anti-good segue into brief discussion of current anti-discrimination policydiscrimination policy
Two issues prominent in debateTwo issues prominent in debate
– Discharge/termination vs. hiringDischarge/termination vs. hiring
– Affirmative Action Affirmative Action
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Discharge/termination vs. hiringDischarge/termination vs. hiring
Do anti-discrimination policies mainly provide protection Do anti-discrimination policies mainly provide protection against against dischargedischarge, and fail to remedy discrimination in , and fail to remedy discrimination in hiringhiring? ?
– May be inadvertent consequence of legal structure (proof, May be inadvertent consequence of legal structure (proof, damages, relief)damages, relief)
– Consequence could be Consequence could be deterrence deterrence of hiring of protected of hiring of protected groups groups
Some research on age discrimination in hiring suggests that in Some research on age discrimination in hiring suggests that in states where laws are stronger, there is less hiring of older states where laws are stronger, there is less hiring of older workersworkers
– Not convinced by evidence, but it Not convinced by evidence, but it isis true that evidence of true that evidence of beneficial effects of age discrimination laws does beneficial effects of age discrimination laws does notnot extend extend to hiringto hiring
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Affirmative action (I)Affirmative action (I)
Many components of this debateMany components of this debate
– Benefits of diversity, stigmatization of Benefits of diversity, stigmatization of beneficiaries, hiring/promotion of unqualified beneficiaries, hiring/promotion of unqualified minorities or women (and efficiency minorities or women (and efficiency consequences)consequences)
Useful to think in terms of two prevailing views of Useful to think in terms of two prevailing views of AA, and public’s perception of themAA, and public’s perception of them
– Special training and other programs that help Special training and other programs that help disadvantaged groups advance (supported in disadvantaged groups advance (supported in opinion polls)opinion polls)
– Preferential treatment (opposed)Preferential treatment (opposed)
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Affirmative action (II)Affirmative action (II)
Evidence on effects of AA from data on companies, hiring Evidence on effects of AA from data on companies, hiring procedures, and hiresprocedures, and hires
– Use of more recruiting methods, less reliance on informal Use of more recruiting methods, less reliance on informal networksnetworks
– More women and minority applicantsMore women and minority applicants
– More intensive screening of applicantsMore intensive screening of applicants
– More willingness to hire applicants on welfare, with criminal More willingness to hire applicants on welfare, with criminal records, etc.records, etc.
– More hiring of women and minoritiesMore hiring of women and minorities
– Minority applicants less qualified in terms of educational Minority applicants less qualified in terms of educational requirementsrequirements
– More training and evaluation of hires under AAMore training and evaluation of hires under AA
– Little or no evidence of performance differencesLittle or no evidence of performance differences
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Affirmative Action (III)Affirmative Action (III)
Evidence from my research consistent with “benign” view of AAEvidence from my research consistent with “benign” view of AA– AA results in firms “casting a wider net” in searching for AA results in firms “casting a wider net” in searching for
employeesemployees– Encourages companies to rely less on easily observable Encourages companies to rely less on easily observable
signals like education, criminal record, etc., that are strongly signals like education, criminal record, etc., that are strongly correlated with race but don’t tell us everything about a workercorrelated with race but don’t tell us everything about a worker
– Also encourages some remediation and trainingAlso encourages some remediation and training– End result is that, while costs may be somewhat higher, result End result is that, while costs may be somewhat higher, result
is most consistent with equally qualified but more diverse is most consistent with equally qualified but more diverse workforce emergingworkforce emerging
Big unanswered question is what, precisely, are the benefits of Big unanswered question is what, precisely, are the benefits of diversity?diversity?– Could be asked in educational context as wellCould be asked in educational context as well
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Summing upSumming up
Economists focus on what happens in the labor market (as Economists focus on what happens in the labor market (as opposed to before people get to the labor market), exploring how opposed to before people get to the labor market), exploring how discriminatory tastes can affect market transactions and generate discriminatory tastes can affect market transactions and generate these disadvantagesthese disadvantages
Socioeconomic disadvantages of some groups persist today, Socioeconomic disadvantages of some groups persist today, consistent withconsistent with continuing discrimination continuing discrimination
Critical to account for other influences, and not attribute all Critical to account for other influences, and not attribute all observed differences to discriminationobserved differences to discrimination– However, most evidence suggests that discrimination plays However, most evidence suggests that discrimination plays
some role with respect to race, sex, and also agesome role with respect to race, sex, and also age
Public policy has helped to lessen discrimination, while avoiding Public policy has helped to lessen discrimination, while avoiding the more severe problems that critics sometimes allegethe more severe problems that critics sometimes allege– But public policies need continuing reevaluationBut public policies need continuing reevaluation
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Public policy and economics educationPublic policy and economics education On issues related to discrimination, and many other topics, new On issues related to discrimination, and many other topics, new
arguments continually arise in policy discussionsarguments continually arise in policy discussions
Economics educators are front-line of battle to increase economic Economics educators are front-line of battle to increase economic literacy, helping public to sort out the good arguments from the literacy, helping public to sort out the good arguments from the bad onesbad ones– Key elementsKey elements
• Get the basic facts rightGet the basic facts right• Economic reasoning Economic reasoning • Grasp of basic statistical conceptsGrasp of basic statistical concepts• Understanding how public policy works (and don’t forget Understanding how public policy works (and don’t forget
about unintended consequences)about unintended consequences)• Access existing research, but not uncriticallyAccess existing research, but not uncritically
– And in some cases, see if students can do their own And in some cases, see if students can do their own researchresearch
No single formula for teaching students how to think about public No single formula for teaching students how to think about public policy issues, but I hope this “road map” of how economists think policy issues, but I hope this “road map” of how economists think about and study discrimination is a useful modelabout and study discrimination is a useful model
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