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Hiring on the basis of expected productivity in a South African clothing firm

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Using information from the personnel files of a South African clothing firm, I explore the in- and outflow of weekly-paid workers. These employees form a separate labour market within the company. Data was available concerning both the productivity of current workers, and the characteristics of rejected applicants and fired workers. This makes it possible to identify the characteristics which are screened out at entry and the characteristics that influence productivity. This allows for an empirical analysis of discrimination at job-entry. Hiring decisions were found to be consistent with expected productivity. The observed screening out of African workers at job entry could be explained by statistical discrimination, i.e., the actual productivity of African workers in this firm was found to be significantly lower than the productivity of workers of other ethnic backgrounds. The effect of education on productivity was found to be very small.

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File URL: http://www.uq.edu.au/economics/abstract/441.pdf
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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 441.

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Date of creation: 1998
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Handle: RePEc:qld:uq2004:441

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  1. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 881-919, November.
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Cited by:
  1. Yukichi Mano & Takashi Yamano & Aya Suzuki & Tomoya Matsumoto, 2011. "Local and Personal Networks in Employment and the Development of Labor Markets:Evidence from the Cut Flower Industry in Ethiopia," GRIPS Discussion Papers 10-29, National Graduate Institute for Policy Studies.
  2. Paul Frijters & Michael A Shileds & Nikolaos Theodoropoulos & Stephen Wheatley, 2003. "Testing for Employee Discrimination using Matched Employer-Employee Data: Theory and Evidence," School of Economics and Finance Discussion Papers and Working Papers Series 168b, School of Economics and Finance, Queensland University of Technology.
  3. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
  4. Azam, Jean-Paul & Rospabe, Sandrine, 2007. "Trade unions vs. statistical discrimination: Theory and application to post-apartheid South Africa," Journal of Development Economics, Elsevier, vol. 84(1), pages 417-444, September.
  5. Antoninis, Manos, 2006. "The wage effects from the use of personal contacts as hiring channels," Journal of Economic Behavior & Organization, Elsevier, vol. 59(1), pages 133-146, January.

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