RACIAL DISCRIMINATION IN THE LABOR MARKET Social Inequality

RACIAL DISCRIMINATION IN THE LABOR MARKET Social Inequality – Week 13 Jenny Dueñas

“ARE EMILY AND GREG MORE EMPLOYABLE THAN LAKISHA AND JAMAL? ” Bertrand & Mullainathan(2005) • Article details a field experiment on racial discrimination in the labor market • Racial inequality in the U. S. labor market is visible through every way in which economic success is measured • African Americans are twice as likely to be unemployed compared to whites and earn 25% less than whites when they are employed • This warrants the question – Do employers treat applicants from different races differently? If choosing between a white applicant and black applicant with similar backgrounds, are whites favored? 2

EXISTING LITERATURE RESEARCH DESIGN • Some research says that white applicants have the advantage compared to a black applicant • Shaped off the correspondence testing methodology used to study minority outcomes in the UK. • Others dispute this by suggesting that we have moved beyond racial discrimination in the labor market • Sent pseudo resumes to Chicago and Boston want ads & measure the rates of interview callbacks for each resume • Suggestions that it is actually Whites who disadvantaged for the sake of racial diversity • Responded to over 1, 300 ads and almost 5, 000 resumes to jobs in sales, admins support, clerical and customer service • Limits in data make it difficult to actually measure employer discrimination • Intentionally and equally assign white and black “sounding” names to the resumes (50/50) • Intentionally varied the postal addresses on resumes • Also varied credentials of pseudo applicants • Sent 2 higher credentialed and 2 lower credentialed pseudo resumes to each ad and each resume had one white sounding name and one black sounding name 3

RESULTS • Statistically significant racial difference in rate of callbacks • White applications got a callback at the rate of 10: 1 (10 applications for 1 callback) compared to 15: 1 for African Americans (15 applications for 1 callback) • White sounding name on an application receives as many more callbacks as an extra 8 years of job experience • Authors are attributing this gap to differences in names, as they were randomly assigned • Race also plays a role in how much of a reward African Americans receive for having a higher quality resume • In other words, gap between black and white widens with a higher quality resume • Postal address affected rate of callbacks; postal addresses in more affluent areas received more callbacks than addresses in less affluent areas. Although, affluent postal codes did not help African American applications more than whites • Even industries thought to practice stricter adherence to affirmative action policies did not show preferential treatment of African American pseudo applicants. 44

RESULTS • Same with large employers or employers who claim they are “Equal Opportunity Employers” • In Chicago, racial gap was smaller when employer was located in majority African American neighborhoods • Racial gap measured here is not symmetrical with Census bureau’s measure of racial gap • Racial gap measured here is not symmetrical with racial gap measured in different occupations • Racial disparity in callbacks not statistically distinguishable across all occupations and industries 55

QUESTIONS/CONSIDERATIONS Do the callback results imply discrimination? • Authors state yes because a race-neutral selection process should have resulted in equal callbacks • When an employer sees the name “Lakisha” or “Jamal” they could assume the applicant has a disadvantaged background. • In this case, less about race and more about being discriminatory against a background • However, this is not reconciled with the findings that suggest a more affluent postal code is not more helpful to African Americans • Reverse Discrimination? • If African American applicants are supposedly in high demand then perhaps an average level employer would think a particular African American applicant would be less inclined to take an average level job due to more or better employment opportunities • This would explain the larger gap in callbacks when African Americans have higher quality resumes • However, there was no evidence in these findings to suggest that there were more African American callbacks than whites in the higher leveled positions • no evidence in these results that found differences in the racial disparity among jobs with different skills; even among higher skilled jobs there is still a white advantage 66

QUESTIONS/CONSIDERATIONS How does this study fit into other studies of similar examination? • Commonly, economic discrimination classified in 2 categories: taste-based and statistical discrimination models • Both of these models could explain the racial disparity in callbacks • But unclear if these models could explain additional findings, specifically, the increased racial gap in callbacks with higher credentials and the homogeneity of this callback disparity among occupation, industry, and to some lesser degree employer characteristics and industries • Taste-based models differ depending on who’s “tastes” are being measured; customers, co-workers or employers • By occupation and industry, taste-based models focused on customer and co-worker discrimination are opposed to the homogeneity of the racial gap in this study. However, level of customer contact and percentage of white employees vary considerably in these categories • Employer taste-based models could possibly be uniform with the homogeneity of this study but we also do not know what actually contributes to employers’ tastes 77

QUESTIONS/CONSIDERATIONS How does this study fit into other studies of similar examination? • This study’s findings that employers in areas with higher African American populations are less likely to discriminate are also consistent with existing literature. But again, we still see the persistence in the widening of disparity with higher credentialed applicants. • Statistical discrimination models are popular alternatives to taste-based models • In one class of statistical discrimination models, observable race is used to measure unobservable skills. This still fails to explain the larger gap among credentialed applicants. • Another class of statistical discrimination models focuses more on how precise the information employers have about applicants is. For example, “. . employers believe that the same observable signal is more precise for Whites than for African Americans, ” (p. 750). This particular explanations suggests that there is a lower return for African Americans because the same signals used and examined by employers will have more weight for White applicants • The authors point out that the possibility that skills of African Americans may not carry as much weight because affirmative action would make it easier for them to acquire these skills 88

QUESTIONS/CONSIDERATIONS Do the methods just “isolate” the effect of race or are there other factors not considered here? 99

“DISCRIMINATION IN A LOW-WAGE LABOR MARKET: A FIELD EXPERIMENT” Pager, Western & Bonikowski (2005) • Article details a field experiment on racial discrimination in the labor market • Because some advances have been made toward racial equality it can be common to claim that racial discrimination still contributes to economic inequality • Yet, racial inequality in the labor market does not relent • Impetus for the field experiment and warrants the question “Does employer discrimination continue to effect labor market outcomes for minority workers? ” • This particular study revisits a conversation about racial discrimination in the labor market but in a contemporary context 10

EXISTING LITERATURE RESEARCH DESIGN • Racial prejudice and discrimination in a contemporary context is contested • Aiming to observe specific processes by which hiring discrimination occurs • Mixed bag of literature; existing literature to suggest both the persistence of racial discrimination and evidence that discrimination has relented as well as vague and ambiguous results from other studies • Presents equally qualified applicants to entry level positions only varying by race • Research focusing on wages rather than employment does not necessarily support the argument of persistent discrimination and in fact points to individual deficiencies and differences in skill set • Contextualizing discrimination as a process rather than one single decision • 2 tester teams; 340 entry level positions in NY city over 9 months • “Well spoken, ” college educated between 22 -26 years old and were either black, latino or white • Testers had similar verbal skills, interactional styles and physical attractiveness • The first team testing a basic racial hierarchy with white applicants as a benchmark for discrimination • The second team compares black and latinos to a white tester with a criminal record • The criminal record was 18 months of incarceration for a drug related felony (possession of cocaine with intent to distribute) and was revealed to employers 11

RESULTS Extracted from the proportion of applications that received either a callback or a job offer by applicant’s race • Team 1 • Outcomes of equally qualified White, Latino and Black applicants were compared • In applications to 171 employers, white testers received a callback 31% of the time, 25. 2% for Latinos and 15. 2% for blacks (1 a) • All 3 racial groups were contrasted by ratio (1 b). The black-white ratio is statistically significant and had a meaningful difference from the latino-white ratio as well as the latino/black ratio • Indicates that employers possess racial preferences and apply them during the hiring process • Indicates relative to equally qualified black applicants, employers have a strong preference for hiring white and Latino job applicants; to the extent that black job applicants will have to search twice as long as an equally qualified white applicant to either receive a callback or job offer 12 12

RESULTS • Team 2 • Outcomes of equally qualified white, Latino and Black applicants were compared • Out of 169 applications, whites with criminal records received a callback or job offer at a rate of 17. 2%, Latinos 15. 4% and Blacks 13% (2 a) • Even though the criminal record of the white applicant weakens the advantage, the white applicant still does at least equally, if not better, than the black applicant with no criminal record. • Again, all three racial groups were contrasted by ratio (2 b) • This time none of the ratios were found to be statistically significant as they were all close to 1 • This specific finding indicates that there was little racial preference demonstrated by employers • However, the finding which indicates that white applicants with a criminal background fare better on the job market than Latino or Black applicants with no criminal backgrounds is substantial as it suggests that being a felon has the same status as being a minority 13 13

RESULTS Interactions Between Applicants and Employers • Authors coded three main findings: categorical exclusions; shifting standards; and race-coded job channeling • Categorical exclusion is an immediate rejection of the minority applicant in favor of the white applicant • Happens early on in the hiring process • Very little interaction with the applicant and see a stringent demonstration of racial beliefs and/or preferences 14 14

RESULTS Interactions Between Applicants and Employers • Shifting standards reflects a processual pattern of decisions that are shaped by racial perceptions • See qualities and deficits take on a racialized context making them static and not the same for each applicant 15 15

RESULTS Interactions Between Applicants and Employers • Race-based job channeling focused on actual job placement • Process of occupational segregation driving minority applicants towards positions requiring more physical labor and less contact with the public 16 16

RESULTS Interactions Between Applicants and Employers • These three categories are not mutually exclusive and could overlap at any time • Not a linear process • Observations of racial discrimination were not blatant forms of racism • In fact, discrimination was so subtle that was really only noticeable once racialized patterns were compared 17 17

QUESTIONS/CONSIDERATIONS • Typologies cannot account for all of the disparities measured; plenty of unobserved decision making occurred particularly when exclusions occurred without any physical interaction between employer and applicant • Applicants in this study represented “best-case scenario, ” as their profiles included college education and they had acceptable forms of selfpresentation and interpersonal communication skills; this indicates that outcomes for minority applicants with fewer skills than the pseudo applicants here may very well have poorer outcomes that aren’t measured in this study • Also cannot interpret these results as the absolute level of discrimination experienced by those seeking employment in NY 18 18

QUESTIONS/CONSIDERATIONS • Employers in this study over represent the smaller businesses who aren’t held as stringently to equal opportunity obligations • Limited generalizability; only classified advertisements were used when searching for employers • Only 25 -30% of jobs applied for are found through classified ads; other platforms include social networks, employment agencies and walk-ins 19 19

THANK YOU 20