Who’s the Boss? Evidence of Job Seeker Bias from a Field Experiment

Abstract

Do job seekers consider the race or gender of an employer when applying for a job? While we have extensive research on employer-side discrimination, we know less about employee-side biases and their consequences. In this study, we examine how the gender and race of the employer shapes the willingness of prospective employees to apply for a job. To examine this, we conducted a field experiment where we randomized real job seekers into three conditions according to employer demographics. We find that job candidates are less likely to apply to a job when they learn that the founders are Black and when they did apply, they requested ten percent higher salary. In addition, the more qualified a candidate the less likely they were to apply to Black founders, leaving Black founders with a pool of candidates both smaller, worse, and more expensive than their white peers. We find no gender penalty for white female founders. Findings from two survey experiments suggest that the penalty is unique to white applicants evaluating Black founders and reflects a concern among white applicants that they will be less likely to fit within a firm and that the firm is less likely to be successful in the long run. We find no evidence of a widespread applicant homophily where all applicants favor founders of their own ethnic group, nor do we find evidence of widespread statistical discrimination whereby all applicants penalize Black founders for being atypical members of the entrepreneurial class.

Keywords: entrepreneurship, discrimination, field experiment, inequality, race

JEL Classification: J5, J15, L26