Discriminating attitudes and wage setting: Evidence from experimental vignettes in a developing country

In this presentation, we use experimental vignettes to study how a worker's personal demographic characteristics affect wage setting and employment decisions among the personnel of a random sample of Mexico City's service sector firms. We explore the effect of sex, skin tone and hair color, face symmetry—as a proxy for beauty or attractiveness—and country of origin. Net of a explicit productivity measure, we find a discriminatory employment penalty of 11% from Central and South American workers as well as a penalty for workers with asymmetric faces of 9% that is present only when operatives take firing decisions— when managers take firing decisions, no “beauty effect” is present. For wages, we find only weak evidence that migrants from Central and South America are offered lower wages than native workers in the Mexican labor market. Finally, we find strong evidence of a sex wage penalty: women are offered wages that are about 6.6% lower than those offered to men.