Does the design of correspondence studies influence the measurement of discrimination?

Abstract

Correspondence studies can identify the extent of discrimination in hiring as typically defined by the law, which includes discrimination against ethnic minorities and females. However, as Heckman and Siegelman (1993) show, if employers act upon a group difference in the variance of unobserved variables, this measure of discrimination may not be very informative. This issue has essentially been ignored in the empirical literature until the recent methodological development by Neumark (2012). We apply Neumark's method to a number of already published correspondence studies. We find the Heckman and Siegelman critique relevant for empirical work and give suggestions on how future correspondence studies may address this critique.JEL classification: J71

Field Experimental Evidence on Gender Discrimination in Hiring: Biased as Heckman and Siegelman Predicted?

“…Interestingly, but differing from the findings of Carlsson et al (2014), we find that the effects through level are, although not significantly different from zero, more or less of the same magnitude as the total unbiased effect. In addition, the effects through variance are rather close to zero.…”

“…Therefore, our results seem to indicate that the tested employers do not perceive a (gender) group difference in the variance of unobserved determinants of productivity. These results, therefore, corroborate with those of Carlsson et al (2014) based on correspondence testing data gathered in Sweden.…”

“…The only attempt to fill this gap we are aware of, is Carlsson et al (2014) who apply Neumark's (2012) econometric framework to a number of already published correspondence studies among which one targeted at gender discrimination. In the present study, we complement their evidence by an empirical investigation of the HS critique in the context of gender discrimination using the same framework but another -and in our opinion theoretically more convincing -identifying assumption.…”

“…Variables used by Baert et al (2015), Carlsson et al (2014) and Neumark (2012) in their application of the Neumark framework in the context of ethnic discrimination were education level, personality traits, work experience, type of neighbourhood, sport activities and application quality. In the context of gender discrimination, Carlsson et al (2014) assumed equal returns for both genders from variation in educational degree, _________________________ international mobility, work experience, employment status and job tenure. Their choice can be criticised on theoretical grounds.…”

“…They show that not controlling for group differences in the variance of unobservable productivity determinants (and ipso facto of unobservable determinants of positive call-back) can lead to spurious evidence of discrimination. The robustness of ethnic discrimination to the Heckman and Siegelman critique (henceforth "HS critique") is tested by three former contributions to the empirical discrimination literature (Baert et al 2015, on Belgian data; Carlsson et al 2014, on Swedish data; Neumark 2012, on US data). These studies show that the HS critique is relevant.…”