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Detecting Discrimination in Audit and Correspondence Studies

  • David Neumark

Audit studies testing for discrimination have been criticized because applicants from different groups may not appear identical to employers. Correspondence studies address this criticism by using fictitious paper applicants whose qualifications can be made identical across groups. However, Heckman and Siegelman (1993) show that group differences in the variance of unobservable determinants of productivity still can generate spurious evidence of discrimination in either direction. This paper shows how to recover an unbiased estimate of discrimination when the correspondence study includes variation in applicant characteristics that affect hiring. The method is applied to actual data and assessed using Monte Carlo methods.

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File URL: http://jhr.uwpress.org/cgi/reprint/47/4/1128
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 47 (2012)
Issue (Month): 4 ()
Pages: 1128-1157

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Handle: RePEc:uwp:jhriss:v:47:y:2012:iv:1:p:1128-1157
Contact details of provider: Web page: http://jhr.uwpress.org/

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  1. Hellerstein, J-K & Neumark, D, 1995. "Sex, Wages, and Productivity : an Empirical Analysis of Israeli, Firm-Level Data," Papers 9501, Michigan State - Econometrics and Economic Theory.
  2. Neumark, David, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 915-41, August.
  3. Judith K. Hellerstein & David Neumark, 2006. "Using Matched Employer–Employee Data to Study Labor Market Discrimination," Chapters, in: Handbook on the Economics of Discrimination, chapter 2 Edward Elgar.
  4. Joanna Lahey, 2006. "Age, Women, and Hiring: An Experimental Study," Working Papers, Center for Retirement Research at Boston College wp2006-23, Center for Retirement Research, revised Nov 2006.
  5. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, vol. 112(483), pages 480-518, November.
  6. 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.
  7. Riach, Peter A. & Rich, Judy, 2007. "An Experimental Investigation of Age Discrimination in the Spanish Labour Market," IZA Discussion Papers 2654, Institute for the Study of Labor (IZA).
  8. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
  9. Lahey, Joanna N. & Beasley, Ryan A., 2009. "Computerizing audit studies," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 508-514, June.
  10. Cornelißen, Thomas, 2005. "Standard errors of marginal effects in the heteroskedastic probit model," Hannover Economic Papers (HEP) dp-320, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
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