Labor Discrimination in US Economy Essay

Bertrand and Mullainathan conducted a research on labor discrimination in the US economy. The objective of the researchers was to determine the relationship between racial discrimination and the rate of employment in the US economy. Thus the main question that they tried to address was, “what is the influence of race in determining the chances of getting a job in the US labor market?”

Research on the employment trends in the US labor market reveals a high level of racial inequality (Bertrand and Mullainathan 991). Members of different races have different opportunities of getting employed. Job applicants of White origin have a better chance of getting jobs as compared to African-Americans. The Whites were found “to be twice unlikely to be unemployed as compared to African-Americans” (Bertrand and Mullainathan 992).

The research findings also indicate that African-Americans were “paid 25% less on average when they are employed in various job categories” (Bertrand and Mullainathan 992). The findings were consistent across all industries. Consequently, various stakeholders in the industry are interested in finding out the causes of the huge gap in employment between the Whites and the African-Americans in the market.

It is against this backdrop that the researches investigated the effect of race in determining the chances of getting employed. The findings will help in formulating labor laws that can help in ensuring equality in the market. Equality will lead to efficiency in the market by enhancing perfect mobility of labor.

Research Methods and Techniques

The researchers used field experiments to study the research question (Bertrand and Mullainathan 993). The field experiment involved correspondence testing (Bertrand and Mullainathan 993). This means that the researches were interested in finding out the rate at which the employers responded to the resumes that were sent by different races in response to job adverts. Thus the callback rate was the main variable that was measured in the study. The research was done in Chicago and Boston (Bertrand and Mullainathan 993).

The research was designed as follows. The researchers prepared several resumes and assigned names to them randomly. Half of the resumes had African-America names and the other half had names that are associated with Whites. The use of different names was meant to “manipulate the perceived race” (Bertrand and Mullainathan 994).

The fictitious resumes were then sent in response to various job adverts in Chicago and Boston (Bertrand and Mullainathan 994). The researchers prepared over five thousand resumes and responded to over one thousand three hundred job adverts (Bertrand and Mullainathan 994).

The large number of resumes helped in improving the accuracy of the findings since a large sample size is more representative. The resumes were divided into two categories namely, the high-quality and the low-quality resumes. The high-quality resumes were associated with applicants with high qualifications while low-quality resumes were associated with applicants who had low qualification.

The high-quality and low-quality resumes were assigned an equal number of names for Whites and African-Americans. The feedbacks that were received in relation to the applications served as the primary data for the research. The data was statistically analyzed and was used to investigate the relationship between race and the chances of getting a job in Boston and Chicago.

Research Findings

The findings of the research were as follows. There was a great difference in the number of callbacks that were received for the resumes that had various racial names. The applicants that were associated with Whites’ names received one call for every ten resumes that they sent (Bertrand and Mullainathan 995).

Those who had African-Americans’ names received one call for every fifteen resumes that they sent. This indicated a 50% gap in the number of calls that were received by the various races. “The difference was found to be statistically significant” (Bertrand and Mullainathan 995).

The research also reveals that race influenced the way employers rewarded the applicants for having better resumes. Whites who had high-quality resumes were able to increase their chances of getting a job by 30 % as compared to the Whites whose resumes were of low-quality (Bertrand and Mullainathan 995). However, for the African-Americans possessing a high-quality resume did not significantly increase the chances of getting a job as compared to African-Americans who had low-quality resumes.

This means that the skills that were possessed by the African-Americans had little effect in improving their chances of being employed. Employers preferred to hire White applicants who lived in “wealthy neighborhoods or neighborhoods that were associated with high levels of education” (Bertrand and Mullainathan 996).

However, the African-Americans who lived in the same neighborhood (wealthy) did not have a better chance of being employed as compared to their colleagues who lived in low-class neighborhoods. There was no correlation between the racial gaps that existed in various industry and the census-based racial gaps (Bertrand and Mullainathan 996). The racial gaps as measured by callback rates were “statically significant in all industries and job categories that were covered in the research” (Bertrand and Mullainathan 996).

In the context of taste theory of discrimination, the researchers explained that their findings indicated that the employers preferred to employ Whites as compared to African-Americans. This means that the employers associated the Whites with superior qualities as compared to the African-Americans. The employers’ preference for the Whites was based on the perception that Whites are a better race as compared to African-Americans.

This explains why the possession of high-quality resumes did not improve the chances of getting a job among the African-Americans. In the context of statistical discrimination theory, the employers associated the Whites with high productivity as compared to the African-Americans. Since the employers are not risk takers they prefer to employ Whites who will guarantee them high productivity in exchange of high wage rates. This explains the difference in the wage rate between Whites and the African-Americans.

Interpretations of the Findings

The resumes that were assigned names that are associated with Whites had a chance of 9.65% of getting a callback (Bertrand and Mullainathan 997). Resumes that had similar qualifications but had names that are associated with African-Americans had 6.5% chance of getting a callback. This indicates a 50% difference in the callback rate (Bertrand and Mullainathan 997). The difference was considered to be statistically significant (Bertrand and Mullainathan 997).

The Whites who possessed high-quality resumes were able to increase their chances of getting a job by 27%. On the other hand, the African-Americans who possessed high-quality resumes were able to increase their chances of getting a job by only 6.7%. This difference was also found to be statistically significant. Thus they concluded that race was used as a discrimination factor in employment.

Biasness

The authors were unbiased due to the following reasons. First, the number of resumes that had names that are associated with Whites was equal to the number of those that had names that are associated with African-Americans. This means that both races had an equal opportunity of being employed.

Second, the sample size was large enough to represent the population. Thus the conclusions that were made using the research’s findings are unbiased. Finally, the researchers took into account the effects of demographic factors such as sex, age and residential areas (Bertrand and Mullainathan 1000).

Recommendations

The conclusion that employers “inferred social class from names” (Bertrand and Mullainathan 997), was based on opinion rather than empirical evidence. The researchers did not use primary data to statistically investigate the relationship between names and employers’ perception of social classes.

Their conclusion was based on the belief that African-Americans belong to the lower social class in the society. The conclusion also contradicts the fact that living in wealthier neighborhoods did not increase the chances of getting jobs among the African-Americans.

Therefore, the researchers should have conducted an investigation in order to determine the relationship between the names and the employers’ perception of social class. For example, interviews or surveys could have been used to obtain information concerning employers’ perception of social class and how it affected their choice of employees.

Evidence for Wage Discrimination

The findings of the research are consistent with the trends in the US labor market. It is evident that the Whites are paid better as compared to African-Americans who possess the same level of qualification. Employees from the two races are usually paid different wages even if they work in the same position.

The research indicated that the African-Americans did not improve their chances of getting a job by possessing a high-quality resume (Bertrand and Mullainathan 997). This confirms the fact that race plays an important role in determining the chances of getting a job in the US labor market.

Works Cited

Bertrand, Marianne and Sendhil Mullainathan. “Are Emily and Greg more employable than Lakisha and Jamal? a field experiment on labor market discrimination.” American Economic Review, 94 (2004): 991-1013.