Working Paper: NBER ID: w16448
Authors: David Neumark
Abstract: Audit studies testing for discrimination have been criticized because applicants from different groups may not appear identical to employers. Correspondence studies address this criticism by using fictitious paper applicants whose qualifications can be made identical across groups. However, Heckman and Siegelman (1993) show that group differences in the variance of unobservable determinants of productivity can still generate spurious evidence of discrimination in either direction. This paper shows how to recover an unbiased estimate of discrimination when the correspondence study includes variation in applicant characteristics that affect hiring. The method is applied to actual data and assessed using Monte Carlo methods.
Keywords: discrimination; audit studies; correspondence studies
JEL Codes: C93; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| applicant characteristics (I23) | perceived productivity (O49) |
| perceived productivity (O49) | hiring outcomes (M51) |
| race (J15) | hiring outcomes (M51) |
| variations in applicant characteristics (I24) | effects of discrimination (J71) |
| observable variations in applicant characteristics (J79) | unbiased estimates of discrimination (J79) |
| variance of unobserved productivity across groups (D29) | spurious evidence of discrimination (J79) |