Statistical Discrimination Theory Research Articles

Bridging the Gender Gap in Academic Engagement among Young Adults: The Role of Anticipated Future Sex Discrimination and Gender-role Orientation.

Academic engagement is vital for college students, yet existing studies reveal inconsistencies in how gender influences academic engagement. Building upon the statistical discrimination theory and identity-based motivation theory, this study develops an integrated model to examine gender differences in college students' academic engagement. Further, the role that gender-role orientation in influencing academic engagement was investigated. Using a sample of 524 college students (Mage = 21.11, SD = 1.98; 47.7% women) from a large university collected in two time periods, the findings indicate that in the Chinese context, women anticipate higher future sex discrimination than men. However, gender-role orientation restores parity between men and women through a moderated mediation: egalitarian gender-role orientation has a stronger effect on women's anticipated future sex discrimination than on men's, resulting in increased academic engagement of women. The findings highlight the need to consider female students' egalitarian beliefs in gender-related academic research.

How regional attitudes towards immigration shape the chance to obtain asylum: Evidence from Germany

Abstract Asylum recognition rates in advanced democracies differ not only across states but also vary within them, translating into fluctuating individual chances to obtain protection. Existing studies on the determinants of these regional inequities typically rely on aggregate data. Utilizing a German refugee survey and leveraging a quasi-natural experiment arising from state-based allocation rules tied to national dispersal policies, we test two explanations for the perplexing regional differences. Drawing on principal–agent models of administrative decision-making, we test whether asylum decision-makers consciously or unconsciously comply with regional political preferences between 2015 and 2017 in Germany, one of the major European destination countries for refugee migration. We furthermore explore whether such biased decision-making amplifies in times of organizational stress as suggested by the statistical discrimination theory. Using mixed-effects logistic regressions, our analyses confirm a lower approval probability in regions with more immigration-averse residents or governments. We cannot confirm, however, that this association is mediated by high workloads or large knowledge gaps. Our results thus suggest that regional political biases affect the individual chance of asylum-seekers to obtain protection irrespective of temporal administrative conditions.

Impact of Graduating with Honours on Entry Wages of Economics Majors*

Employers use various proxies to predict the future labour productivity levels of the job applicants. Success in school, especially in high‐level coursework, is among the most widely used proxies to screen entry‐level candidates. We estimate the causal effect of graduating with honours (i.e. with a grade point average of 3.00 and above out of 4.00) on the starting wages of economics majors in Türkiye. Using comprehensive micro data on all economics majors between 2014 and 2018, matched with administrative records about their first jobs, we implement a regression discontinuity analysis to investigate whether there is any statistically significant jump in the starting wages at the honours‐degree cutoff. We find that graduating with honours increases the wages of males, while there is no impact on females. We further document that the impact on males is almost entirely driven by the graduates of non‐elite universities. In particular, graduating with an honours degree increases the entry wages of males from non‐elite universities by about 4%, on average. We provide an explanation for these patterns using the theory of statistical discrimination. We discuss the potential reasons behind the heterogeneous signal value of graduating with honours between males vs. females and elite versus non‐elite university graduates.

Understanding ethnic hiring discrimination: A contextual analysis of experimental evidence

Previous research has demonstrated that context matters in understanding unequal treatment in hiring—for example, some studies have illustrated that hiring discrimination is low in large organisations or high in public-facing occupations. Following a review of the recent literature on ethnic hiring discrimination, we identified fourteen plausible moderators (i.e. discrimination correlates) from which we derived an equal number of hypotheses related to taste-based and statistical discrimination theories. We empirically tested these hypotheses through a moderation analysis of data from a correspondence experiment supplemented with occupation, organisation, and sector characteristics. Our empirical approach allowed us to simultaneously evaluate and control the interaction effects of multiple contextual factors with ethnic hiring discrimination. Overall, we find that minority (non-Flemish) candidates receive significantly fewer positive responses to their job applications than majority (Flemish) candidates. In particular, non-Flemish candidates experience significantly less discrimination when applying to not-for-profit organisations or organisations with a large workforce. We also find partial empirical support for the hypotheses that hiring discrimination is high in occupations requiring much interaction between colleagues and in occupations where labour market tightness is low. Future research avenues include evaluating the rationale behind the discrimination correlates mentioned above and testing the replicability of this study's findings across different institutional contexts, labour markets, and grounds for discrimination.

Pursuing equal pay for equal work: Gender diversity in management positions and the gender pay gap throughout the wage distribution

Despite the massive incorporation of women into the labor market, equal pay for equal work remains a challenge. This article analyzes the influence of gender diversity in management positions on the gender wage gap (GWG) throughout the entire pay scale in Spain. The results show the existence of a GWG, particularly for wages below the average; though it decreases when female participation in management is higher. This is in line with the reduction of information asymmetry problems considered in statistical discrimination theories, which explain the barriers to promotion associated with dynamics at entry-level and low-qualified positions. JEL CLASSIFICATION: C31, J31, J71, M14

When Less Is More: How Statistical Discrimination Can Decrease Predictive Accuracy

Discrimination is a pervasive aspect of modern society and human relations. Statistical discrimination theory suggests that profit-maximizing employers should use all the information about job candidates, including information about group membership (e.g., race or gender), to make accurate predictions. In contrast, research on heuristics in psychology suggests that using less information can be better. Drawing on research on heuristics, we show that even small amounts of inconsistency can make predictions using group membership less accurate than predictions that do not use this information. That is, whereas statistical discrimination theory implies that better predictions can be achieved by using all available information about an individual (including group characteristics that may be correlated with but do not cause performance), our model shows that using all available information only improves predictive accuracy under a very specific set of conditions, thus suggesting that statistical discrimination often results in worse predictions. By understanding when statistical discrimination improves or worsens predictions, our work cautions decision makers and uncovers paths toward reducing the occurrence of situations in which statistical discrimination benefits predictive accuracy, thus reducing its pervasiveness in society. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1626 .

Information and the Gender Gap in the Market for Top Managers: Evidence from a Quasi-Experiment

This study examines the role of information on the gender gap in the executive labor market from the market frictions perspective. We examine whether increases in objective and reliable information about managerial quality improve the promotion rates of women managers. To obtain exogenous variation in the availability of information, we exploit a natural experiment provided by the adoption of the International Financial Reporting Standards (IFRS) in 2005 by the European Union countries. Consistent with statistical discrimination theory, we find that when performance information is more available and reliable, the promotion rates of women executives almost double. These increases are driven by both internal and external promotions. However, the gains in advancement rates are dampened in regions where societal views on women in the workplace are less favorable. This study rectifies the data and empirical challenges in identifying sources of discrimination in the executive labor market and offers implications for theory development and firm policy.

A transformative service research perspective on caste-based discrimination in microcredit lending in India

PurposeThis research aims to address the transformative service research (TSR) agenda by examining the issue of caste-based financial exclusion in microcredit lending services in India. To do so, it draws on statistical discrimination theory from labour economics to develop and test a multi-level prosocial service orientation framework.Design/methodology/approachSurvey data come from 238 loan officers and 250 lower caste loan applicants across 43 microfinance institutions (MFIs) in India. The data are analysed using hierarchical linear modelling, a method appropriate for investigating micro- and macro-level organisational variables.FindingsAt the micro level, the service orientation factors of social dominance orientation and algorithmic-driven lending decisions affect financial exclusion of lower caste bottom-of-the-pyramid (BoP) vendors. At the macro level, the service orientation mechanism of inclusive service climate reduces caste-based financial exclusion, while the level of lending risk to reduce discrimination receives no support.Research limitations/implicationsResearch in other contexts is warranted to confirm the prosocial service orientation model. Methodological challenges at the BoP also present avenues for insightful work.Social implicationsThe study shows the importance of an inclusive service climate and reassessment of algorithmic-driven lending decisions to eliminate caste-based indicators in lending decisions. It also recommends policy reform of caste-based affirmative action at the macro- and micro-levels of lending decisions.Originality/valueThis research extends the TSR agenda to include caste-based discrimination in prosocial services. It takes a multidisciplinary perspective on services research by incorporating statistical discrimination theory from labour economics to extend understanding of service orientation.

Is labour market discrimination against ethnic minorities better explained by taste or statistics? A systematic review of the empirical evidence

ABSTRACT To mitigate ethnic labour market discrimination, it is essential to understand its underlying mechanisms because different mechanisms call for different counteracting measures. To this end, we reviewed the recent literature that confronts the theories of taste-based and statistical discrimination against the empirical reality. Whereas the empirical evidence for both mechanisms is generally mixed, (field) experimental research, which predominantly focuses on hiring outcomes, appears to yield proportionately more evidence in favour of taste-based discrimination vis-à-vis statistical discrimination. This finding suggests that the taste-based mechanism may better explain ethnic discrimination in hiring. However, we also observe that the measurement operationalisations of the mechanisms vary substantially between studies and that alternative theoretical interpretations of some of the evidence are plausible. Taken together, additional research efforts, using clear measurement standards and appropriate synthesis methods, are required to solidify the review’s main finding.

The disabling effects of enabling social policies on organisations’ human capital development practices for women

AbstractPaid parental leave and externally provided childcare are social policies designed to enhance parents' labour force participation. These policies influence not only men's and women's decisions regarding their labour market activity but also organisational decision makers' (ODMs) expectations about their employees' availability to work and thus, their willingness to invest in their employees' human capital. Using a sample of over 13,000 individuals from 19 countries, we investigate the interaction between gender and social policies on human capital development practices. In line with statistical discrimination theory, which suggests that ODMs hold different expectations about female and male productivity, we find that paid parental leave and externally provided childcare are negatively associated with the provision of human capital development for women but not for men.

Race, Criminal Records, and Discrimination Against Job Seekers: Examining Attitudinal Mechanisms

Regardless of why it happens, racial discrimination is damaging and unacceptable. Efforts to reduce discrimination, however, are most successful when we understand the mechanisms that give rise to it. Building on the observation that employers are members of the public, we examine two attitudinal mechanisms that may foster discriminatory employment practices in the context of criminal background checks: stereotypes and threat-based animus. First, we estimate public perceptions of arrest prevalence using two nationwide surveys. Next, we experimentally test the effects of two racially threatening primes—Census projections about a coming majority-minority America, and information about the prison population’s racial composition—on attitudes toward hiring job applicants with criminal records. Consistent with statistical discrimination theory, respondents identify black males as having the highest arrest prevalence. Respondents are less accurate, however, when it comes to gender differences: they underestimate arrest prevalence for black, Hispanic, and white males, and tend to overestimate it for females. On the other hand, our experiments provide little evidence of an effect of threat-based animus: racially threatening primes that are influential in other contexts do not significantly impact attitudes about hiring applicants with criminal records.

Why do women more often intend to study abroad than men?

In many Western countries, women are more likely to study abroad than men. At present, there is a lack of theory-guided empirical studies searching explanations for this pattern. We address this research gap by examining gender differences in study abroad intent among first-semester students in Germany. To derive a comprehensive theoretical framework, we draw on social role theory of sex differences, cognitive development theory, new home economics and statistical discrimination theory. Using data from the nationally representative 2010 DZHW School Leavers Survey, we test our hypotheses by estimating logistic regressions and non-linear effect decompositions. We find that women more often intend to study abroad primarily because of the gender-specific interest profiles they develop throughout their early life course: Related to their subject choice at school, women tend to acquire competences (e.g., language skills) that ease later stays abroad. To some extent, women’s better educational performance during school also explains their better chances to study abroad. Once in higher education, women tend to choose fields of study in which studying abroad is considered more valuable for competence acquisition. Losing time due to studying abroad is less of an obstacle for women but—against theoretical expectations—not because of a lower labour market orientation. Finally, the expectation to interrupt the professional career for taking care of the family deters women—especially those from a low social background—from studying abroad, but not men. We do not find evidence that women understand studying abroad as a strategy to counteract this anticipated discrimination. Overall, our results underscore the particular importance of social role and cognitive development theory for explaining gender differences in the spatial mobility of students.

Felon history and change in U.S. employment rates

In recent decades, the share of U.S. adults with felony-level criminal records has risen and the growth in the employment rate has slowed. Sociological theories of labeling and stigmatization, as well as economic theories of statistical discrimination, suggest a possible causal connection between the two phenomena. Surveys of employers have shown increasing reliance on criminal background checks, for example, and audit studies reveal explicit discrimination against people with felony-level criminal records. This paper draws on novel, state-level annual measures of individuals with felony-level records to estimate pooled cross-sectional, panel models predicting changes in aggregate employment rates. Estimates from these models indicate that a 1 percentage point increase in the share of a state's adult population with a felony history is associated with 0.3 percentage point increase in non-employment (being unemployed or not in the labor force) among those aged 18 to 54. Subgroup analysis shows that effects are stronger for women and whites. These results suggest that the stigma of a felony record may play an important part in aggregate employment rates as well as in individual hiring practices.

Statistical Discrimination and the Rationalization of Stereotypes

The theory of statistical discrimination is a dominant social scientific framework for understanding discrimination in labor markets. To date, the literature has treated this theory as a model that merely explains employer behavior. This article contends that the idea of statistical discrimination, rather than simply providing an explanation, can lead people to view social stereotyping as useful and acceptable and thus help rationalize and justify discriminatory decisions. A preregistered survey experiment with more than 2,000 participants who had managerial experience shows that exposure to statistical discrimination theory strengthened people’s belief in the accuracy of stereotypes, their acceptance of stereotyping, and the extent to which they engaged in gender discrimination in a hiring simulation. Reading a critical commentary on the theory mitigated these effects. These findings imply that theories of discrimination, and the language associated with them, can rationalize—or challenge the rationality of—stereotypes and discrimination and, as a result, shape the attitudes and actions of decision-makers in labor markets.

Statistical discrimination when group members are aware of their stereotype: Learning from David Hume and Adam Smith

The founding contributions to the theory of statistical discrimination implicitly supposed group members unaware of how their choices influences their stereotype. Hume and Smith point out how small religious groups police their members' behavior evidencing awareness of stereotypical externalities. Did African-American legislators vote to impose a harsher penalty for using a drug favored by their constituents than what would be imposed on the chemically equivalent drug favored by others in awareness of stereotypical externalities? Newspaper discussions are full of concern for the cost of the stereotype on law abiding voters.

Is there evidence for statistical discrimination against ethnic minorities in hiring? Evidence from a cross-national field experiment

While statistical discrimination theory is often proposed as an important explanation for ethnic discrimination in hiring, research that empirically scrutinizes its underlying assumptions is scant. To test these assumptions, we combine data from a cross-national field experiment with secondary data indicative of the average labor productivity of ethnic communities. We find little evidence that adding diagnostic personal information reduces discrimination against ethnic minorities. Furthermore, we do not find an association between language similarity or the socioeconomic resources of the ethnic community and hiring discrimination. However, our findings show that discrimination is related to the socioeconomic development of the country of ancestry. Finally, the impact of these indicators of group productivity is generally not moderated by the amount of diagnostic personal information. Taken together, these findings question several core assumptions of statistical discrimination theory.

Age Discrimination in Hiring Decisions: A Factorial Survey among Managers in Nine European Countries

AbstractThis article analyses old-age discrimination in managers’ hypothetical hiring decisions. We expect that older job candidates are less likely to be hired than equally qualified younger candidates. Statistical discrimination theory argues that when recruiters have more information about the candidate’s skills, age is less important for hiring decisions. Given inconclusive results of previous studies, we elaborate on the theory by focusing on the content rather than the amount of information. We argue that information is primarily influential if it debunks, rather than confirms, ageist stereotypes. To test this argument, a factorial survey was conducted among 482 managers in nine European countries. The findings show that older candidates indeed receive lower hireability scores, and this finding is robust across countries and sectors. However, we do not find that stereotype-rejecting information moderates age discrimination: it does not matter whether recruiters have information that debunks or confirms ageist stereotypes; age is equally important in both situations. Our findings suggest that for hiring decisions, the valuation of applicants’ skills and their age are largely independent.

Gender, parenthood, and hiring intentions in sex-typical jobs: Insights from a survey experiment

We ran a survey experiment with Dutch employers to investigate hiring discrimination in sex-typical jobs. We ask if women are especially discriminated against when they have children, whether discrimination applies similarly in different occupations, and whether statistical discrimination or status-characteristic theories best account for discriminatory practices (if any).Employers rate fictitious candidates for either a female-typical job (primary-school teacher) or a male-typical job (software engineer). Employers are found to display a slight preference for female candidates when filling a teacher post, although such bias is less strong for female applicants with children. No such ranking is found for a software engineer vacancy, nor do we find different salary offers across candidates and across vacancies. Employers do not appear to favour men over women for positions likely to be on the career track, as predicted by statistical discrimination theories, nor do they expect women to be less capable than men, as posited by status-characteristic theory. Female candidates with children, however, are expected to be less committed to their job and work fewer hours, especially in the teacher experiment. Such expectations seem to have small consequences for the hiring decisions and salary offers Dutch employers make in our study.

Is Labour Market Discrimination Against Ethnic Minorities Better Explained by Taste or Statistics? A Systematic Review of the Empirical Evidence

Scholars have gone to great lengths to chart the incidence of ethnic labour market discrimination. To effectively mitigate this discrimination, however, we need to understand its underlying mechanisms because different mechanisms lead to different counteracting measures. To this end, we reviewed the recent literature that confronts the seminal theories of taste-based and statistical discrimination against the empirical reality. First, we observed that the measurement operationalisation of the mechanisms varied greatly between studies, necessitating the development of a measurement standard. Second, we found that 20 out of 30 studies examining taste-based discrimination and 18 out of 34 studies assessing statistical discrimination produced supportive evidence for said mechanisms. However, (field) experimental research, which predominantly focuses on hiring outcomes, yielded more evidence in favour of taste-based vis-a-vis statistical discrimination, suggesting that the taste-based mechanism might better explain ethnic discrimination in hiring.

Establishment Closures in Germany: The Motherhood Penalty at Job Search Durations

AbstractThis study contributes to the research on motherhood penalties by investigating based on German longitudinal register data whether mothers take longer to search for a job than childless women. We develop a unique research design to test the theory of statistical discrimination as well as the theory of status-based discrimination. We use establishment closures as a starting point that creates equal conditions for all previously employed women. Following a subsequent coarsened exact matching approach, we investigate the job search length of almost 3,000 comparable full-time working childless women and mothers from almost 700 establishments by applying event history techniques. Even after extensive robustness checks that back up the main findings, we can show that mothers have lower transition rates to re-employment than childless women. When including additional information, such as higher age of the youngest child or shorter parental leave durations, both of which serve as indicators of higher labour market attachment, we find reduced differences and buffering effects on the motherhood penalty.