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Racial Bias in the Manager-Employee Relationship: An Analysis of Quits, Dismissals, and Promotions at a Large Retail Firm

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  • Laura Giuliano
  • David I. Levine
  • Jonathan Leonard

Abstract

Using data from a large U.S. retail firm, we examine how racial matches between managers and their employees affect rates of employee quits, dismissals, and promotions. We exploit changes in management at hundreds of stores to estimate hazard models with store fixed effects that control for all unobserved differences across store locations. We find a general pattern of own-race bias in that employees usually have better outcomes when they are the same race as their manager. But we do find anomalies in this pattern, particularly when the manager-employee match violates traditional racial hierarchies (for example, nonwhites managing whites).

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File URL: http://jhr.uwpress.org/cgi/reprint/46/1/26
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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 46 (2011)
Issue (Month): 1 ()
Pages: 26-52

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Handle: RePEc:uwp:jhriss:v:46:y:2011:i:1:p:26-52

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Web page: http://jhr.uwpress.org/

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  1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, April.
  2. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  3. Laura Giuliano & David I. Levine & Jonathan Leonard, 2009. "Manager Race and the Race of New Hires," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 589-631, October.
  4. Kate Antonovics & Brian G. Knight, 2009. "A New Look at Racial Profiling: Evidence from the Boston Police Department," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 163-177, February.
  5. Carrington, William J & Troske, Kenneth R, 1998. "Interfirm Segregation and the Black/White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 231-60, April.
  6. Price, Joseph & Wolfers, Justin, 2007. "Racial Discrimination Among NBA Referees," IZA Discussion Papers 2863, Institute for the Study of Labor (IZA).
  7. Thomas S. Dee, 2005. "A Teacher Like Me: Does Race, Ethnicity, or Gender Matter?," American Economic Review, American Economic Association, vol. 95(2), pages 158-165, May.
  8. Bentley W. MacLeod, 2003. "Optimal Contracting with Subjective Evaluation," American Economic Review, American Economic Association, vol. 93(1), pages 216-240, March.
  9. Donohue, John J, III & Levitt, Steven D, 2001. "The Impact of Race on Policing and Arrests," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 367-94, October.
  10. Anbarci, Nejat & Lee, Jungmin, 2008. "Speed Discounting and Racial Disparities: Evidence from Speeding Tickets in Boston," IZA Discussion Papers 3903, Institute for the Study of Labor (IZA).
  11. Christopher Avery & Susan Athey & Peter Zemsky, 2000. "Mentoring and Diversity," American Economic Review, American Economic Association, vol. 90(4), pages 765-786, September.
  12. Michael A. Stoll & Steven Raphael & Harry J. Holzer, 2004. "Black job applicants and the hiring officer's race," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(2), pages 267-287, January.
  13. Timothy Bates, 1994. "Utilization of minority employees in small business: A comparison of nonminority and black-owned urban enterprises," The Review of Black Political Economy, Springer, vol. 23(1), pages 113-121, June.
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Cited by:
  1. Garnero, Andrea & Rycx, Francois, 2013. "The Heterogeneous Effects of Workforce Diversity on Productivity, Wages and Profits," IZA Discussion Papers 7350, Institute for the Study of Labor (IZA).
  2. Feld, Jan & Salamanca, Nicolas & Hamermesh, Daniel S., 2013. "Endophilia or Exophobia: Beyond Discrimination," IZA Discussion Papers 7380, Institute for the Study of Labor (IZA).
  3. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2013. "Language Skills and Homophilous Hiring Discrimination: Evidence from Gender-and Racially-Differentiated Applications," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00877458, HAL.
  4. Giuliano, Laura & Ransom, Michael R., 2011. "Manager Ethnicity and Employment Segregation," IZA Discussion Papers 5437, Institute for the Study of Labor (IZA).
  5. Gabriel Burdin, 2014. "Are Worker-Managed Firms More Likely to Fail than Conventional Enterprises? Evidence from Uruguay," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 67(1), pages 202-238, January.
  6. Yuki, Kazuhiro, 2012. "Stereotypes, segregation, and ethnic inequality," MPRA Paper 39704, University Library of Munich, Germany.
  7. David Masclet & Emmanuel Peterle & Sophie Larribeau, 2012. "The Role of Information in Deterring Discrimination: A New Experimental Evidence of Statistical Discrimination," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201238, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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