Why does racial inequality persist? | Glenn Loury
25 Jun 2022 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, discrimination, economic history, economics of education, economics of information, human capital, labour economics, labour supply, poverty and inequality Tags: racial discrimination, statistical discrimination
Why Do People Hold STEREOTYPES? Thomas Sowell
22 Jun 2022 Leave a comment
in applied price theory, comparative institutional analysis, defence economics, discrimination, economic history, economics of crime, economics of education, economics of information, human capital, labour economics, labour supply, law and economics, Thomas Sowell Tags: racial discrimination, statistical discrimination
The ubiquity and selectiveness of statistical discrimination
05 Oct 2020 Leave a comment
in applied price theory, discrimination, economics of crime, economics of education, economics of information, human capital, labour economics, labour supply, law and economics, politics - USA, poverty and inequality Tags: adverse selection, asymmetric information, racial discrimination, statistical discrimination

Lang and Lehmann 2005, JEL
.@ProfDBernstein on a feminist proof by contradiction of the accuracy of stereotypes
07 Dec 2019 Leave a comment
@NZPrivacy has just increased statistical discrimination by landlords @NZHumanRights
20 Aug 2019 Leave a comment
in applied price theory, discrimination, entrepreneurship, industrial organisation, law and economics, managerial economics, organisational economics, politics - New Zealand, property rights, survivor principle Tags: offsetting behaviour, racial discrimination, statistical discrimination, The fatal conceit, unintended consequences
Ban the box, no questions on criminal records, increased statistical discrimination against young black male job applicants
01 Mar 2019 Leave a comment
in applied price theory, discrimination, economics of crime, economics of information, labour economics, labour supply, law and economics, politics - USA Tags: asymmetric information, racial discrimination, statistical discrimination
Is Everyone A Little Bit Racist? | Implicit Bias
09 Oct 2018 Leave a comment
in discrimination, economics of information, economics of media and culture, gender, labour economics Tags: racial discrimination, sex discrimination, statistical discrimination
Why is the Swedish gender wage gap so stubbornly stable (and high)?
06 May 2017 Leave a comment
in discrimination, gender, human capital, labour economics, labour supply, occupational choice Tags: economics of fertility, female labour force participation, gender wage gap, maternity leave, preference formation, statistical discrimination, Sweden, unintended consequences
The Swedes are supposed to be in a left-wing utopia. Welfare state, ample childcare and long maternity leave but their gender wage gap is almost as bad as in 1980. They must be a misogynist throwback.
Maybe Megan McArdle can explain:
There are countries where more women work than they do here, because of all the mandated leave policies and subsidized childcare — but the U.S. puts more women into management than a place like Sweden, where women work mostly for the government, while the private sector is majority-male.
A Scandinavian acquaintance describes the Nordic policy as paying women to leave the home so they can take care of other peoples’ aged parents and children. This description is not entirely fair, but it’s not entirely unfair, either; a lot of the government jobs involve coordinating social services that women used to provide as homemakers.
The Swedes pay women not to pursue careers. The subsidies from government from mixing motherhood and work are high. Albrecht et al., (2003) hypothesized that the generous parental leave a major in the glass ceiling in Sweden based on statistical discrimination:
Employers understand that the Swedish parental leave system gives women a strong incentive to participate in the labour force but also encourages them to take long periods of parental leave and to be less flexible with respect to hours once they return to work. Extended absence and lack of flexibility are particularly costly for employers when employees hold top jobs. Employers therefore place relatively few women in fast-track career positions.
Women, even those who would otherwise be strongly career-oriented, understand that their promotion possibilities are limited by employer beliefs and respond rationally by opting for more family-friendly career paths and by fully utilizing their parental leave benefits. The equilibrium is thus one of self-confirming beliefs.
Women may “choose” family-friendly jobs, but choice reflects both preferences and constraints. Our argument is that what is different about Sweden (and the other Scandinavian countries) is the constraints that women face and that these constraints – in the form of employer expectations – are driven in part by the generosity of the parental leave system
Most countries have less generous family subsidies so Claudia Goldin’s usual explanation applies to their falling gender wage gaps
Quite simply the gap exists because hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. That is, in many occupations earnings have a nonlinear relationship with respect to hours. A flexible schedule comes at a high price, particularly in the corporate, finance and legal worlds.
Blogging (and statistical discrimination) explained
30 Mar 2016 Leave a comment
in economics of media and culture Tags: blogging, profiling, statistical discrimination
Drug testing helps minority job applicants @jacindaardern
25 Mar 2016 Leave a comment
in discrimination, economics of information, entrepreneurship, human capital, labour economics, personnel economics Tags: asymmetric information, counter-signalling, employer discrimination, racial discrimination, screening, signalling, statistical discrimination
Statistical discrimination is a harsh mistress. If reliable measures of the quality of job applicants are unavailable for short-listing, such as credit checks, coarser, less reliable screening devices will be employed. That was the case when credit checks were prohibited in employment recruitment:
Looking at 74 million job listings between 2007 and 2013, Clifford and Shoag found that employers started to become pickier, especially in cities where there were a lot of workers with low credit scores. If a credit-check ban went into effect, job postings were more likely to ask for a bachelor’s degree, and to require additional years of experience.
There are other ways that employers could have also become more discerning, Shoag says. They might have started to rely on referrals or recommendations to make sure that applicants were high-quality. In the absence of credit information to establish trustworthiness, they may even have fallen back on racial stereotypes to screen candidates. The researchers couldn’t measure these tactics, but they’re possibilities.
Drug testing allows employers to dispel less accurate stereotypes about drug use among different ethnic and social groups. They increased hiring of minorities because a reliable measure became available of their drug use:
…after a pro-testing law is passed in a state, African-American employment increases in sectors that have high testing rates (mining, manufacturing, transportation, utilities, and government).
These increases are substantial: African-American employment in these industries increases by 7-30%. Because these industries tend to pay wage premia and to have larger firms offering better benefits, African-American wages and benefits coverage also increase. Real wages increase by 1.4-13% relative to whites. The largest shifts in employment and wages occur for low skilled African-American men.
I also find suggestive evidence that employers substitute white women for African-Americans in the absence of testing. Gains in hiring African-Americans in these sectors may have come at the expense of women, particularly in states with large African-American populations.
Employers test for drug use both for health and safety reasons and as a way of screening out less reliable employees. People who break the rules are not reliable employees and that includes taking drugs. In low skill jobs, what employers seek is a recruit who is friendly and reliable.
Testing of the skills of workers also showed similar results. What happened is that the ratio of black to white hirings do not change. The administration of these skills tests allowed the more productive of both white and black job applicants to be identified and hired.
Employers already had an accurate stereotype of the average skills of different ethnic groups. Administration of tests allow them to identify which members of each group were the most productive.
It is a standard result that statistical discrimination improves the chances of below-average applicants subject to the stereotype but harms those of above average quality. For that reason, applicants look for what methods of counter-signalling to show that they are indeed a quality applicant – make themselves stand out from the crowd.
Employers profit from developing screening devices that go beyond stereotypes to identify above-average applicants. They want screening devices that find those who do not otherwise stand out from the crowd because of difficulties in transferring credible information about their quality. This is a special difficulty with low-skilled vacancies because hiring is made based much more than on character than experience.
There is rampant height discrimination in the movie business?
13 Jun 2015 Leave a comment
in discrimination, industrial organisation, labour economics, movies, survivor principle Tags: competition as a discovery procedure, height discrimination, Hollywood economics, market selection, statistical discrimination, The meaning of competition
Spare me the conspiracy theories. When an actor or actress walks into a scene, the first impression of the audience is not supposed to be about how tall they are or how they differ in height from those already on the stage or film set.
This casting decision can be deliberate or simply that actors who do not differ as much in height seem to work well together and have more successful careers because of better rapport.
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