Working Paper: CEPR ID: DP17136
Authors: Aislinn Bohren; Peter Hull; Alex Imas
Abstract: Economics often defines and measures discrimination as disparities arising from the direct effect of group identity. We develop new tools to model and measure systemic discrimination, which captures how discriminatory decisions in other domains---past, future, or contemporaneous---contribute to disparities in a given decision. We show that systemic discrimination can be driven by disparate signaling technologies or differential opportunities for skill development. We then propose a new measure based on a decomposition of total discrimination into direct and systemic components, and show how it can be used to estimate systemic discrimination in both experimental and observational data. We illustrate these new tools in three applications, including a novel Iterated Audit experimental paradigm with real hiring managers. The applications also identify behavioral frictions that blunt the impact of individual-level interventions and perpetuate systemic discrimination, suggesting the need for systems-based policy responses to systemic discrimination.
Keywords: systemic discrimination; racial/gender disparities; dynamic discrimination
JEL Codes: D63; D83; J16; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| direct discrimination (J71) | systemic discrimination (J71) |
| biased wage offers (J31) | lower salaries for women (J31) |
| direct discrimination (J71) | manager decisions (M54) |
| systemic discrimination (J71) | direct discrimination (J71) |
| systemic discrimination (J71) | outcomes for high-performing women (I24) |
| systemic discrimination (J71) | outcomes for low-performing women (I24) |
| differential access to information and opportunities (I24) | systemic discrimination (J71) |
| systemic discrimination (J71) | observed disparities (I24) |