Working Paper: NBER ID: w10763
Authors: David H. Autor; David Scarborough
Abstract: Because minorities typically fare poorly on standardized tests, job testing is thought to pose an equity-efficiency trade-off: testing improves selection but reduces minority hiring. We develop a conceptual framework to assess when this tradeoff is likely to apply and evaluate the evidence for such a trade-off using data from a national retail firm whose 1,363 stores switched from informal to test-based worker screening over the course of on year. We document that testing yielded more productive hires at this firm -- raising median tenure by 10-plus percent. Consistent with prior research, minorities performed worse on the test. Yet, testing had no measurable impact on minority hiring, and productivity gains were uniformly large among minorities and non-minorities. These results suggest that job testing raised the precision of screening without introducing additional negative information about minority applicants, most plausibly because both the job test and the informal screen that preceded it were unbiased.
Keywords: Job Testing; Minority Hiring; Productivity; Employment Equity
JEL Codes: D63; D81; J15; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Unbiased Testing (C90) | Productivity Gains (O49) |
| Job Testing (C99) | Productivity (O49) |
| Job Testing (C99) | Minority Hiring (J15) |
| Job Testing (C99) | Precision of Worker Screening (J28) |
| Job Testing (C99) | Hiring Gaps (J63) |