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Do firms redline workers?

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  • Diaz, Ana Maria
  • Salas, Luz Magdalena

Abstract

Firms statistically discriminate (redline) against job candidates based on where they live. We conducted a correspondence test by sending three identical fictitious resumes to every non-professional job offer posted in two main job vacancy newspapers in Bogota. The only difference between the resumes was the residential address in which the applicants lived. Two of the three resumes sent in each trio were located with the same commuting time (and geographical distance) from the job, but one resided in a low-crime neighborhood and the other in a high-crime neighborhood. The third resume was for a fictitious individual located in a low-crime neighborhood that was further away (longer commuting time and greater distance). We find that employers statistically discriminate (redline) based on commuting time to work. In particular, living a half-hour away from the vacancy reduces the callback rate by 14 percent while holding the attributes of the place of residence constant. We did not find evidence that employers respond to neighborhood effects.

Suggested Citation

  • Diaz, Ana Maria & Salas, Luz Magdalena, 2020. "Do firms redline workers?," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:regeco:v:83:y:2020:i:c:s0166046219302637
    DOI: 10.1016/j.regsciurbeco.2020.103541
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    Cited by:

    1. Perez Perez, Jorge, 2020. "City Minimum Wages and Spatial Equilibrium Effects," SocArXiv fpx9e, Center for Open Science.
    2. Sylvain Chareyron & Laetitia Challe & Yannick L’Horty & Pascale Petit, 2022. "Can subsidies paid directly to employers reduce residential discrimination in employment? An assessment based on serial field experiments," Urban Studies, Urban Studies Journal Limited, vol. 59(6), pages 1202-1218, May.
    3. Magnus Carlsson & Stefan Eriksson, 2023. "Do employers avoid hiring workers from poor neighborhoods? Experimental evidence from the real labor market," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(2), pages 376-402, April.

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    More about this item

    Keywords

    Statistical discrimination; Productivity; Employment; Neighborhood effects; Spatial mismatch; Correspondence test;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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