Testing for Employee Discrimination by Race and Sex
According to the theory of employee discrimination, if members of one group have a taste for discrimination against another group, they will demand a compensating wage premium for working with members of the other group. This study is the first to directly test this theory at the micro level. We find evidence that both white and nonwhite youths practice employee discrimination, although the form of this discrimination differs by race. Results hold for both the South and non-South, as well as for the country as a whole. The hypothesis of employee discrimination by sex was also examined but rejected.