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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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  • Giuliano, Laura
  • Levine, David I.
  • Leonard, Jonathan

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 across all outcomes 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 (e.g. nonwhites managing whites).

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Bibliographic Info

Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt8pm012h0.

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Date of creation: 01 Mar 2009
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Handle: RePEc:cdl:indrel:qt8pm012h0

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Related research

Keywords: race; discrimination; own-race bias; manager-employee relationship; quits; dismissals; promotions;

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References

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  1. 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).
  2. Joseph Price & Justin Wolfers, 2007. "Racial Discrimination Among NBA Referees," NBER Working Papers 13206, National Bureau of Economic Research, Inc.
  3. 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.
  4. 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.
  5. 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.
  6. Bentley W. MacLeod, 2003. "Optimal Contracting with Subjective Evaluation," American Economic Review, American Economic Association, vol. 93(1), pages 216-240, March.
  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. 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.
  9. Susan Athey & Christopher Avery & Peter Zemsky, 1998. "Mentoring and Diversity," NBER Working Papers 6496, National Bureau of Economic Research, Inc.
  10. 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.
  11. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  12. 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.
  13. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, October.
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Cited by:
  1. 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.
  2. Salamanca Acosta N. & Feld J.F. & Hamermesh D., 2013. "Endophilia or exophobia: beyond discrimination," Research Memorandum 026, Maastricht University, Graduate School of Business and Economics (GSBE).
  3. 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.
  4. Andrea Garnero & François Rycx, 2013. "The heterogeneous effects of workforce diversity on productivity, wages and profits," DULBEA Working Papers 13-04, ULB -- Universite Libre de Bruxelles.
  5. Giuliano, Laura & Ransom, Michael R., 2011. "Manager Ethnicity and Employment Segregation," IZA Discussion Papers 5437, Institute for the Study of Labor (IZA).
  6. Yuki, Kazuhiro, 2012. "Stereotypes, segregation, and ethnic inequality," MPRA Paper 39704, University Library of Munich, Germany.
  7. 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.

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