Applied economics: The dynamics of racial discrimination in a virtual labour market
Published: 28 April 2022
4 May. Professor Arnaud Chevalier, Royal Holloway, University of London
Professor Arnaud Chevalier, Royal Holloway, University of London
'The Dynamics of Racial Discrimination in a Virtual Labour Market' (co-authored by A. Bryson)
Wednesday 4 May, 3pm - 4.30pm
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We test Becker's prediction on employer racial prejudice in a dynamic environment where discrimination is not illegal and information on all workers’ productivity is available to all firms. Using information on 3 million identical firms over a nine month period, we find that, consistent with Becker’s model, the marginal black worker needs to be more productive than a white worker to be recruited, promoted and to avoid dismissal. These decisions lead to firms becoming more discriminatory over time. White and black workers are close substitutes but since discrimination affects the most productive workers, discriminating employers suffer losses of 0.15 standard deviation in productivity. The results are robust to three different measures of race.
Arnaud Chevalier is a Professor of Economics at Royal Holloway, University of London. Arnaud's principal interests are in applied labour economics, specifically education, health and economics of the family. He has published in, among others, the Journal of Political Economy, Economic Journal, Journal of Health Economics, and the Journal of Population Economics. He is the editor of the Data and Method subject area of the IZA World of Labor and, since 2017, is a member of executive committee of the European Association of Labour Economists. Arnaud was a Senior Research Associate at IZA from September 2014 until August 2016, and has been an IZA Research Fellow since October 2002.
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First published: 28 April 2022