Part I.docx - Part I 1 For white people percentage of LFPR...

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Part I 1) For white people: percentage of LFPR in the white part of town = 60 percentage of LFPR in the black part of town = 40 The increase in percentage points when switching to the white part of town = 20 For black people: percentage of LFPR in the white part of town = 45 percentage of LFPR in the black part of town = 25 The increase in percentage points when switching to the black part of town = 20 The difference-in-differences is the same for both white and black people so there isn’t a discriminatory hiring practice according to this estimator. However, although the percentage changes are the same, the LFPR of the two groups are not the same so the difference-in-differences estimator falls short in identifying the discrimination in LFPR. There is a certain amount of discrimination in both parts of the town and it is not appropriate to say that all employers in the white part of town are discriminatory; there are firms there which wanted to hire black people as well.
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