Rational discrimination


Chris Dillow links to this very clever paper (free access):


We provide a test for statistical discrimination or "rational" stereotyping in environments in which agents learn over time. Our application is to the labor market. If profit maximizing firms have limited information about the general productivity of new workers, they may choose to use easily observable characteristics such as years of education to "statistically discriminate" among workers. As firms acquire more information about a worker, pay will become more dependent on actual productivity and less dependent on easily observable characteristics or credentials that predict productivity.


When you start out on a job, employers have to make do with easily available information about you (years of education, race, etc). As the employer observes individual productivity first-hand, however, this information becomes obsolete. So, if employers are fully rational and internalise the additional information efficiently, education and other easily observable characteristics should become increasingly weaker predictors of wages. The way they test for this is by utilising additional variables for characteristics that are not easily observable but are correlated with productivity:

Consider a wage equation that contains both the interaction between experience and a hard-to-observe variable that is positively related to productivity and the interaction between experience and a variable that firms can easily observe, such as years of education. We show that the wage coefficient on the unobservable productivity variable should rise with time in the labor market and the wage coefficient on education should fall. We investigate this proposition using panel data on education, the AFQT test, father’s education, and wages for young men and their siblings from NLSY. [...] Our results support the hypothesis of statistical discrimination.

So far, so good. But the authors also go on to test for discrimination on the basis or race; econometric specification issues aside, their results are worrying:

We use a similar methodology to investigate whether employers statistically discriminate on the basis of race. If our model is taken literally, the small race differentials for new workers and the spread in the race gap with experience is most consistent with the view that race is negatively correlated with productivity and the productivity gap becomes reflected in wages as fims acquire additional information that can legally be used to differentiate among workers. We wish to stress however, that other factors are probably as or more important in differences between whites and blacks in wage profiles, and race differences in human capital accumulation accounts for at least part of our findings.



by datacharmer | Sunday, November 04, 2007
  | | Rational discrimination @bluematterblogtwitter

1 comments:

  1. Anonymous Says:

     

    視訊 影音視訊聊天室 視訊聊天室 視訊交友 視訊聊天 視訊美女 視訊辣妹 免費視訊聊天室

    色情遊戲 寄情築園小遊戲 情色文學 一葉情貼圖片區 情人視訊網 辣妹視訊 情色交友 成人論壇 情色論壇 愛情公寓 情色 舊情人 情色貼圖 色情聊天室 色情小說 做愛 做愛影片 性愛


    免費視訊聊天室 aio交友愛情館 愛情公寓 一葉情貼圖片區 情色貼圖 情色文學 色情聊天室 情色小說 情色電影 情色論壇 成人論壇 辣妹視訊 視訊聊天室 情色視訊 免費視訊 免費視訊聊天 視訊交友網 視訊聊天室 視訊美女 視訊交友 視訊交友90739 UT聊天室 聊天室 豆豆聊天室 尋夢園聊天室 聊天室尋夢園 080聊天室 080苗栗人聊天室 女同志聊天室 上班族聊天室 小高聊天室


    AV AV女優 自慰器 自慰器

    視訊 影音視訊聊天室 視訊交友


    網頁設計 網頁設計公司 最新消息 訪客留言 網站導覽