From the Royal Economic Society Conference at the University of Manchester
ILLEGAL DISCRIMINATION STILL SIGNIFICANT AND PERSISTENT: New survey of 70 studies over the last 15 years
- Published Date: March 2015
Field studies of discrimination in markets ensure that group identity is the only difference observed by the decision-maker about an individual. Carefully matched testers, one from the group that may be the victim of discrimination, apply for jobs, rental accommodation or to buy a house or flat, or to purchase goods or services. This can be done in person, over the telephone, (where testers are trained) or, in the majority of studies, in writing, usually by email (where content and style are equivalent).
Among the findings of the 70 experiments in the analysis:
• An African-American applicant needed to apply to 50% more job vacancies than a white applicant to be offered an interview.
• Having a higher qualification made virtually no difference for African-Americans but it made a significant improvement in interview offers for whites.
• White applicants with a criminal record received more interviews than African-Americans with no criminal record.
• Older workers needed to make between two to three times as many job applications as a young worker to get an offer of interview.
• When purchasing products, higher prices were quoted to minority applicants buying used cars in the United State and Israel, drinks in nightclubs and bars in New Orleans, and seeking car repairs in Chicago.
The author notes that discrimination of this type is hard to counteract by developing additional skills: ‘Immigrant groups were discriminated against despite being educated in schools, and proficient in the language, of the country of residence.’
It is illegal in many countries for an employer or estate agent to discriminate, but these studies indicate its continued covert existence. One problem is that it is difficult for a victim of this type of discrimination to find evidence to instigate legal action under current legislation, raising the issue of the adequacy of anti-discrimination laws.
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Social exclusion is a disturbing feature of some individual and minority group lives and is an intractable problem for governments in many countries. Discriminatory behaviour may play a part in this outcome.
Investigating if discrimination exists in markets has been the focus of 70 studies over the last 15 years. These studies use an experimental approach to show clearly the effect of being an individual from a minority group, ensuring that group identity is the only difference observed by the decision-maker. Carefully matched testers apply for jobs in the labour market, for rental accommodation or to purchase a house or flat in the housing market, and in the product market, to purchase goods or services. This can be done in person, over the telephone, (where testers are trained) or, in the majority of studies, in writing, usually by email (where content and style are equivalent).
The 70 studies have investigated if discrimination exists on the basis of race, ethnicity, gender, age, disability, sexual orientation, obesity, caste and religion. Significant and persistent discrimination against the vast majority of these groups in all markets was found. High levels of discrimination in hiring were recorded against ethnic groups, older workers, homosexuals and men applying to female-dominated jobs.
Immigrant groups were discriminated against despite being educated in schools, and proficient in the language, of the country of residence. Middle Eastern and Moroccan groups across Europe and African-Americans in the United States were discriminated against when seeking jobs or housing. An African-American applicant needed to apply to 50% more job vacancies than a white applicant to be offered an interview.
Having a higher qualification made virtually no difference for African-Americans but it made a significant improvement in interview offers for whites. Even more disturbingly, white applicants with a criminal record received more interviews than African-Americans with no criminal record. Older workers needed to make between two to three times as many job applications as a young worker to get an offer of interview.
You may think that factors other than those directly related to the individual may affect hiring decisions such as firm size, location, gender or race/ethnicity of recruiters, the proportion of the minority group living in the area of the firm location, firms having a stated equal employment opportunity policy. But there is no evidence of systematic effects from these other factors on the likelihood of getting an interview.
When purchasing products, higher prices were quoted to minority applicants buying used cars in the United States and Israel, drinks in nightclubs and bars in New Orleans, or seeking car repairs in Chicago.
Market transactors’ behaviour might exhibit outright prejudice or profit considerations. Clear evidence of profit-taking motivating behaviour, however, was found only in product markets.
Dishonest concealment of rejection of applicants of enquirers for jobs or housing was reported: telling the minority applicant that they have been rejected because the job vacancy has been filled or that they were over qualified (only to contact the majority applicant the following day to ask them to make a time for interview); the minority tester being told that applications for renting were not being taken, only for the majority tester to be told, when enquiring hours later, that applications for renting were being accepted.
While it is illegal in many countries for an employer or real estate agent to discriminate, the significant differences against minority groups recorded in these studies, indicates its covert existence. It would be extremely difficult for an individual to gain prima facie evidence to instigate legal action under current legislation where it is complaint-based, raising the issue of the adequacy of these anti-discrimination laws.
ENDS
What do field experiments of discrimination in markets tell us? A meta analysis of studies conducted since 2000
Judith Rich
