Working Paper: CEPR ID: DP17676
Authors: Rahul Deb; Ludovic Renou
Abstract: We derive a non-parametric test for statistical discrimination that can be applied to cross-sectional wage data. Specifically, we show that the wage distributions for two groups (with identical observable characteristics) are consistent with a general reduced-form model of statistical discrimination if, and only if, neither wage distribution first-order stochastically dominates the other. Our model allows us to interpret a rejection of this condition as evidence of bias.
Keywords: Statistical Discrimination; Wage Distributions
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wage distributions not first-order stochastically dominating each other (D39) | consistent with statistical discrimination (J79) |
| rejection of stochastic dominance condition (D81) | taste-based discrimination (J71) |
| wage distributions consistent with statistical discrimination (J79) | consistent with identical productivity distributions (D39) |
| wage distributions dominate each other (J31) | not solely attributed to statistical discrimination (J79) |
| differences in mean productivities (D29) | generalization of test (C12) |