Employment discrimination


Employment discrimination is a form of illegal discrimination in the workplace based on legally protected characteristics. In the U.S., federal anti-discrimination law prohibits discrimination by employers against employees based on age, race, gender, sex, religion, national origin, and physical or mental disability. State and local laws often protect additional characteristics such as marital status, veteran status and caregiver/familial status. Earnings differentials or occupational differentiation—where differences in pay come from differences in qualifications or responsibilities—should not be confused with employment discrimination. Discrimination can be intended and involve disparate treatment of a group or be unintended, yet create disparate impact for a group.

Definition

In neoclassical economics theory, labor market discrimination is defined as the different treatment of two equally qualified individuals on account of their gender, race, disability, religion, etc. In religion, the Catholic Church prohibits disabled persons from becoming priests which excludes them from a paid role. Discrimination is harmful since it affects the economic outcomes of equally productive workers directly and indirectly through feedback effects. Darity and Mason summarise that the standard approach used in identifying employment discrimination is to isolate group productivity differences. Differences in outcomes that cannot be attributed to worker qualifications are attributed to discriminatory treatment.
In the non-neoclassical view, discrimination is the main source of inequality in the labor market and is seen in the persistent gender and racial earnings disparity in the U.S. Non-neoclassical economists define discrimination more broadly than neoclassical economists. For example, the feminist economist Deborah Figart defines labor market discrimination as "a multi-dimensional interaction of economic, social, political, and cultural forces in both the workplace and the family, resulting in different outcomes involving pay, employment, and status." That is, discrimination is not only about measurable outcomes but also about unquantifiable consequences. It is important to note that the process is as important as the outcomes. Furthermore, gender norms are embedded in labor markets and shape employer preferences as well worker preferences; therefore, it is not easy to separate discrimination from productivity-related inequality.
Although labor market inequalities have declined after the U.S. Civil Rights Act of 1964, the movement towards equality has slowed down after the mid-1970s, especially more in gender terms than racial terms. The key issue in the debate on employment discrimination is the persistence of discrimination, namely, why discrimination persists in a capitalist economy.

Evidence

Statistical

or the concentration of men and women workers in different occupations or industries in and of itself is not evidence of discrimination. Therefore, empirical studies seek to identify the extent to which earnings differentials are due to worker qualification differences. Many studies find that qualification differences do not explain more than a portion of the earnings differences. The portion of the earnings gap that cannot be explained by qualifications is then attributed by some to discrimination. One prominent formal procedure for identifying the explained and unexplained portions of the gender wage differentials or wage gap is the Oaxaca–Blinder decomposition procedure.
Another type of statistical evidence of discrimination is gathered by focusing on homogeneous groups. This approach has the advantage of studying economic outcomes of groups with very similar qualifications.
In a well-known longitudinal study, the University of Michigan Law School graduates were surveyed between 1987 and 1993, and later between 1994 and 2000 to measure the changes in the wage gap. The group was intentionally chosen to have very similar characteristics. Although the gap in earnings between men and women was very small immediately after graduation, it widened in 15 years to the point that women earned 60 percent of what men earned. From the abstract: Sex differences in hours worked have increased over time and explain more of the sex-based earnings gap, while sex differences in job settings and years spent in private practice have declined and explain less of the gap.
Other studies on relatively homogeneous group of college graduates produced a similar unexplained gap, even for the highly educated women, such as Harvard MBAs in the United States. One such study focused on gender wage differences in 1985 between the college graduates. The graduates were chosen from the ones who earned their degree one or two years earlier. The researchers took college major, GPA and the educational institution the graduates attended into consideration. Yet, even after these factors were accounted for, there remained a 10-15 percent pay gap based on gender. Another study based on a 1993 survey of all college graduates had similar results for black and white women regarding gender differences in earnings. Both black women and white women made less money compared to white, non-Hispanic men. However, the results of earnings were mixed for Hispanic and Asian women when their earnings were compared to white, non-Hispanic men. A 2006 study looked at Harvard graduates. The researchers also controlled for educational performance such as GPA, SAT scores and college major, as well as time out of work and current occupation. The results showed 30 percent of the wage gap was unexplained. Therefore, although not all of the unexplained gaps attribute to discrimination, the results of the studies signal gender discrimination, even if these women are highly educated. Human capitalists argue that measurement and data problems contribute to this unexplained gap.
One recent example of employment discrimination is the inequality in higher positions. For instance, while 62% of accountants and auditors in the US are women, only 9% of Chief Financial Officers in the US are women. According to the research, not only are women underrepresented in their profession, but they are also underpaid, 16% less on average.
According to the United Nations, approximately one in six people globally experience discrimination on various grounds, with racial discrimination, gender, and disability being among the most common.

From experiments

It is possible to investigate hiring discrimination experimentally by sending fabricated job applications to employers, where the fictitious candidates differ only by the characteristic to be tested. This method is also called correspondence testing. If the researchers receive less positive replies for minority applicants, it can be concluded that this minority faces discrimination in hiring. A systematic review of 40 studies conducted between 2000 and 2014 found significant discrimination against ethnic minorities at all stages of the recruitment process, concluding that overall "race/ethnic minority groups needed to apply for nearly twice as many jobs as the majority group to get a positive response". When investigating gender-based discrimination, the same review concluded that "men applying for strongly female-stereotyped jobs need to make between twice to three times as many applications as do women to receive a positive response for these jobs" and "women applying to male-dominated jobs face lower levels of discrimination in comparison to men applying to female-dominated jobs." This study also identified discrimination based on age, sexual orientation and obesity.
A meta-analysis of more than 700 correspondence test conducted between 1990 and 2015 concluded that " minority applicants have 49% lower odds to be invited for an interview, compared to the equally qualified majority candidate". However, they found no indication of any systematic discrimination based on gender.
In a 2016 systematic review intending to list " All Correspondence Experiments Since 2005", virtually all studies of racial discrimination found that ethnic minorities were disadvantaged. Of 11 studies that looked at gender discrimination, five found no evidence of discrimination, four found that women were advantaged, and two found that men were advantaged. Some studies also identified discrimination based on attractiveness, less physically attractive people being less likely to be hired.
A meta-analysis of 18 studies from various OECD countries found that gay and lesbian applicants face discrimination in hiring on the same level as ethnic discrimination.
In 2021, a large-scale study published in Nature tracked the behavior of recruiters on a Swiss online recruitment platform. Based on more than 3 million profile views, they found that "immigrant and minority ethnic groups face a substantially lower contact rate compared to native Swiss citizens". The most affected groups were people from Asia and Sub-Saharan Africa. On average, the study found "no evidence of meaningful differences between the contact rates of women and men". However, by looking separately at male-dominated and female-dominated occupations, the researchers found that women face a 6.7% hiring penalty in the 5 most male-dominated occupations. On the other hand, men face a 12.6% penalty when applying for jobs dominated by women.
In 2013, a US based study showed Muslim hijab wearing women had a gap in call backs that women not wearing hijabs with the same employment profiles did not have. The study ran a field experiment of 49 male and 63 female employees from 72 retails stores and 40 restaurants with price points that targeted mid-income level clientele. 14 women ages 19–22 and of varied ethnicities, volunteered to act as job applicants, "confederates". 14 additional women acted as "interaction observers." Each observer was paired with one confederate to oversee all eight of the confederate's trails. For half the trails the confederate wore a plain black hijab and dressed similarly, for the other half they dressed similarly but did not wear hijab. Confederates were coached on a verbal script and entering and leaving work places. Mock trials were held to prepare for the role. After training was complete confederate/observer pair were dispatched to eight different work places within a mall. The observer entered the store and acted as clientele, and timed the confederates interactions. The confederate, meanwhile, asked for a manager and then presented three questions regarding employment. The questions are as follow: "Do you have a job position open for a______ ?", "Could I fill out a job application?", and "What sort of things would I be doing if I worked here?" The confederate and observer were asked not to speak to one another until they had completed submitting data to avoid bias. The research comes to the conclusion that there is formal and interpersonal discrimination against hijab wearing Muslim women.
Group featureGroup disadvantageComparisonSettingApplications sent outRef.
African American33.3% fewer interviewsApplicants with names that sound African American versus whiteUnited States2001 to 2002
Gay5.0% and 5.1% fewer interview invitations
1.9% and 1.2% lower salaries 		Applicants whose CVs indicate membership in gay university societies vs other student societiesUnited Kingdom2013
Middle Eastern ethnicity33.3% fewer interviewsApplicants with male names that sound Middle Eastern versus SwedishSweden2005 to 2006
Hijab wearing Muslim WomenMajor gap in call backs, permission to fill out job application and more perceived employer negativity and less employer interest.Hijab wearing women versus non-Hijab wearing womenUnited StatesPost 9/11