Having It Easy: Consumer Discrimination and Specialization in the Workplace

Abstract

Most studies analyzing the adjustments of workers to discrimination focus on sorting decisions, such as occupations workers pursue. We instead analyze on-the-job adjustments, focusing on the effects of discrimination by consumers. Specifically, using data from a couple of large-scale restaurants, we investigate the effects of an outward yet immutable physical trait - symmetry of the facial attributes of workers - on trade offs workers make, and the extent to which the trade offs are shaped by consumer preference for the trait. Large-scale restaurants are well-suited for studying these issues because, as with many jobs in the services sector, workers must trade off quality of service for the quantity of consumers they serve. Using a combination of observational data and data generated by a field experiment, we find consumers have a preference for the trait and that preferred workers deliver lower service quality. Instead they specialize in serving more consumers. The findings imply that when outward physical traits substitute for service quality in consumer preferences, preferred workers specialize in tasks having no services component because consumers punish them less for poor performance. Our evidence further implies preferred workers are better off, as they earn the same as their coworkers despite working fewer hours. We conclude that consumer discrimination shapes comparative advantage and, by doing so, generates inequality in the workplace.

Keywords: Comparative Advantage, Labor Market Discrimination, Consumer Discrimination, Wage Differentials, Services

JEL Classification: J31, J71, L80, M50