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Racial Bias in the Manager-Employee Relationship: An Analysis of Quits, Dismissals, and Promotions at a Large Retail Firm

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

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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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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  1. 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.
  2. Laura Giuliano & David I. Levine & Jonathon Leonard, 2006. "Manager Race and the Race of New Hires," Working Papers 0722, University of Miami, Department of Economics.
  3. Bentley MacLeod, 2001. "Optimal Contracting with Subjective Evaluation," Theory workshop papers 357966000000000036, UCLA Department of Economics.
  4. Joseph Price & Justin Wolfers, 2007. "Racial Discrimination Among NBA Referees," NBER Working Papers 13206, National Bureau of Economic Research, Inc.
  5. Susan Athey & Christopher Avery & Peter Zemsky, 1998. "Mentoring and Diversity," NBER Working Papers 6496, National Bureau of Economic Research, Inc.
  6. Jonathan S. Leonard & David I. Levine, 2006. "The Effect of Diversity on Turnover: A Large Case Study," ILR Review, Cornell University, ILR School, vol. 59(4), pages 547-572, July.
  7. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
  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. 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.
  10. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  11. 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.
  12. 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).
  13. Kate L. Antonovics & Brian G. Knight, 2004. "A New Look at Racial Profiling: Evidence from the Boston Police Department," NBER Working Papers 10634, National Bureau of Economic Research, Inc.
  14. Michael A. Stoll & Steven Raphael & Harry J. Holzer, 2004. "Black Job Applicants and the Hiring Officer's Race," ILR Review, Cornell University, ILR School, vol. 57(2), pages 267-287, January.
  15. 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.
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