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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 can still 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://www.nber.org/papers/w16448.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16448.

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Date of creation: Oct 2010
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Publication status: published as David Neumark, 2012. "Detecting Discrimination in Audit and Correspondence Studies," Journal of Human Resources, University of Wisconsin Press, vol. 47(4), pages 1128-1157.
Handle: RePEc:nbr:nberwo:16448
Note: LS
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  1. 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.
  2. Joanna N. Lahey, 2008. "Age, Women, and Hiring: An Experimental Study," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
  3. Hellerstein, Judith K & Neumark, David, 1999. "Sex, Wages, and Productivity: An Empirical Analysis of Israeli Firm-Level Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 95-123, February.
  4. David Neumark & Roy J. Bank & Kyle D. Van Nort, 1995. "Sex Discrimination in Restaurant Hiring: An Audit Study," NBER Working Papers 5024, National Bureau of Economic Research, Inc.
  5. Judith Rich & Peter Riach, 2002. "Field experiments of discrimination in the market place," Natural Field Experiments 00328, The Field Experiments Website.
  6. 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.
  7. 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.
  8. Lahey, Joanna N. & Beasley, Ryan A., 2009. "Computerizing audit studies," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 508-514, June.
  9. Cornelißen, Thomas, 2005. "Standard errors of marginal effects in the heteroskedastic probit model," Hannover Economic Papers (HEP) dp-320, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  10. 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).
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