AME Labour Economics Seminar, at the Swedish Institute for Social Research (SOFI).

Alan Benson from University of Minnesota presents "Discrimination in Hiring: Evidence from Retail Sales", a study carried out together with Simon Board and Moritz Meyer-ter-Vehn.

This is an in-person only event.

Read more about our seminars series, workshops and conferences here:

Conferences and seminars

Abstract

We propose a simple model of racial bias in hiring that encompasses three major theories: taste-based discrimination, screening discrimination, and complementary production. We derive a test that can distinguish these theories using the mean and variance of workers' productivity under managers of different pairs of races. We apply this test to study discrimination at a major U.S. retailer using data from around 50,000 newly-hired commission-based salespeople. White, black and Hispanic managers within the same store are significantly more likely to hire workers of their own race, consistent with all three theories. For white-Hispanic and black-Hispanic pairs, mean productivity is greater and productivity variance is lower when manager and worker races match, driven by greater productivity in lower-tail of the productivity distribution. For black-Hispanic pairs the evidence indicates screening discrimination; for white-Hispanic pairs it indicates some combination of screening discrimination and complementary production. Our tests for white-black pairs are less clear.