Detecting Discrimination in Audit and Correspondence Studies

40 Pages Posted: 25 Oct 2010

See all articles by David Neumark

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

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Abstract

Audit studies testing for discrimination have been criticized because applicants from different groups may not appear identical to employers. Correspondence studies address this criticism by using fictitious paper applicants whose qualifications can be made identical across groups. However, Heckman and Siegelman (1993) show that group differences in the variance of unobservable determinants of productivity can still generate spurious evidence of discrimination in either direction. This paper shows how to recover an unbiased estimate of discrimination when the correspondence study includes variation in applicant characteristics that affect hiring. The method is applied to actual data and assessed using Monte Carlo methods.

Keywords: discrimination, audit study, correspondence study

JEL Classification: J7

Suggested Citation

Neumark, David, Detecting Discrimination in Audit and Correspondence Studies. IZA Discussion Paper No. 5263, Available at SSRN: https://ssrn.com/abstract=1696887 or http://dx.doi.org/10.2139/ssrn.1696887

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