Race discrimination

Race discrimination - Racial Discrimination in the Labor...

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Racial Discrimination in the Labor Market 1
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Discrimination Prejudice an adverse judgment or opinion formed without just grounds or adequate knowledge Disparity Observed differences between groups May be the result of discrimination, but may be the result of other factors Discrimination to make a difference in treatment on some basis other than individual merit Disparate treatment Disparate impact 2
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Testing for discrimination Direct Evidence Clear demonstration of racial preference Regression methods Account for differences in characteristics nonexperimental Audit Studies “Experiments” 3
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Examples of Racial Preference in Help Wanted Ads, 1960 Source: Darity and Mason, 1998, “Evidence on Discrimination in Employment: Codes of Gender, Codes of Color,” Journal of Economic Perspectives 12(2). 4
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Regression analysis Use large, national data sets with information on workers to “predict” wages Control for differences in productive characteristics that affect wages Wage = B 0 + B 1 *race + B 2 *education + B 3 *sex + B 4 *experience + B 5 *tenure at job + B 6 *training + B 7 *age + ε Discrimination is represented by: Estimate of B 1 Portion of wage difference not explained by productive characteristics 5
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Regression methods Possible drawbacks? Some characteristics that affect wages: are unobservable. cannot be measured precisely. may be the result of past discrimination. Results Controlling for productivity differences reduces African- American/white wage gap, but doesn’t eliminate it. 6
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Neal and Johnson: Pre-Market Factors Study Estimate the AA-white wage gap, using AFQT score as an early adult as a measure of skill. W = f(Race/Ethnicity, Gender, Age, AFQT) W wages at age 26-29 AFQT test score at age 16-18 Why use AFQT at age 16-18? Measures achievement and learned skills Racial gap in AFQT scores (1 SD) Evidence that AFTQ predicts military job performance (for both Whites and African-Americans) Use an early measure, so it won’t be affected by labor market discrimination 7
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Neal and Johnson study: Regression results Estimated Wages of African-
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This note was uploaded on 09/07/2011 for the course ECON 375 taught by Professor Staff during the Fall '10 term at Maryland.

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Race discrimination - Racial Discrimination in the Labor...

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