Working Paper: NBER ID: w22278
Authors: David Neumark; Judith Rich
Abstract: There have been over 80 field experiments on traditional dimensions of discrimination in labor and housing markets since 2000, in 23 countries. These studies nearly always find evidence of discrimination against minorities. However, the estimates of discrimination in these studies can be biased if there is differential variation in the unobservable determinants of productivity or quality of majority and minority groups, so it is possible that this experimental literature as a whole overstates the evidence of discrimination. We re-assess the evidence from the 10 existing studies of discrimination that have sufficient information to correct for this bias. For the housing market studies, the estimated effect of discrimination is robust to this correction. For the labor market studies, in contrast, the evidence is less robust, as just over half of the estimates of discrimination either fall to near zero, become statistically insignificant, or change sign.
Keywords: discrimination; field experiments; labor markets; housing markets; bias correction
JEL Codes: J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Differences in the variance of unobservables between majority and minority groups (J79) | Original estimates of discrimination against minorities in labor markets (J79) |
| Bias correction (C51) | Estimated effects of discrimination in labor markets (J79) |
| Bias correction (C51) | Estimated effects of discrimination in housing markets (J79) |
| Qualifications of applicants (I24) | Evidence of discrimination (J71) |
| Observable characteristics (C90) | Perceived quality of applicants (J24) |