Wages, Employment, and Statistical Discrimination: Evidence from the Laboratory
AbstractWhen membership in a particular group conveys valuable information about an individual’s skills, productivity, or other human capital characteristics, a non-prejudiced agent may still find it rational to statistically discriminate. We frame statistical discrimination in a labor market setting for a series of laboratory experiments. A main objective of our experiments is to examine how varying productivity risk along several dimensions impacts outcomes across worker groups. Our design expands upon existing research by generating laboratory data both on wage contracts and unemployment rates of directly competing worker groups. We find some evidence for statistical wage discrimination against workers with identical expected productivity but higher productivity variance. However, those same subjects are less likely to be unemployed, suggesting that our employers view hiring choice and wage contracts as substitutable. These laboratory results have interesting implications for labor markets where employers select from workers belonging to distinct statistical groups, and suggest that statistical discrimination based on wages alone may overestimate the true effect of such discrimination. Key Words:
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Appalachian State University in its series Working Papers with number 12-03.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Thelma C. Raley Hall, Boone, North Carolina 28608
Web page: http://www.business.appstate.edu/departments/economics/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-EXP-2012-09-22 (Experimental Economics)
- NEP-HRM-2012-09-22 (Human Capital & Human Resource Management)
- NEP-LAB-2012-09-22 (Labour Economics)
- NEP-LMA-2012-09-22 (Labor Markets - Supply, Demand, & Wages)
- NEP-LTV-2012-09-22 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-21, June.
- Cornell, Bradford & Welch, Ivo, 1996. "Culture, Information, and Screening Discrimination," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 542-71, June.
- Davis, Douglas D., 1987. "Maximal quality selection and discrimination in employment," Journal of Economic Behavior & Organization, Elsevier, vol. 8(1), pages 97-112, March.
- Lundberg, Shelly J & Startz, Richard, 1983.
"Private Discrimination and Social Intervention in Competitive Labor Markets,"
American Economic Review,
American Economic Association, vol. 73(3), pages 340-47, June.
- Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
- David Dickinson & Ronald Oaxaca, 2004.
"Statistical Discrimination in Labor Markets: An Experimental Analysis,"
2004-04, Utah State University, Department of Economics.
- David L. Dickinson & Ronald L. Oaxaca, 2009. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Southern Economic Journal, Southern Economic Association, vol. 76(1), pages 16-31, July.
- David Dickinson & Ronald Oaxaca, 2005. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Working Papers 05-11, Department of Economics, Appalachian State University.
- Dickinson, David & Oaxaca, Ronald L., 2006. "Statistical Discrimination in Labor Markets: An Experimental Analysis," IZA Discussion Papers 2305, Institute for the Study of Labor (IZA).
- Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
- Oaxaca, Ronald L. & Geisler, Iris, 2003. "Fixed effects models with time invariant variables: a theoretical note," Economics Letters, Elsevier, vol. 80(3), pages 373-377, September.
- Chaim Fershtman & Uri Gneezy, 2001.
"Discrimination In A Segmented Society: An Experimental Approach,"
The Quarterly Journal of Economics,
MIT Press, vol. 116(1), pages 351-377, February.
- Fershtman, C. & Gneezy, U., 2000. "Discrimination in a Segmented Society: an Experimental Approach," Papers 2000-9, Tel Aviv.
- Dennis J. Aigner & Glen G. Cain, 1977. "Statistical theories of discrimination in labor markets," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(2), pages 175-187, January.
- John List, 2004.
"The nature and extent of discrimination in the marketplace: Evidence from the field,"
Natural Field Experiments
00299, The Field Experiments Website.
- John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 49-89, February.
- Goldberg, Pinelopi Koujianou, 1996. "Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 622-54, June.
- Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, 03.
- Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
- Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, vol. 68(1), pages 50-59, January.
- David W. Harless & George E. Hoffer, 2002. "Do Women Pay More for New Vehicles? Evidence from Transaction Price Data," American Economic Review, American Economic Association, vol. 92(1), pages 270-279, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (O. Ashton Morgan).
If references are entirely missing, you can add them using this form.