 Racial disparities in labor outcomes: The effects of hiring discrimination over the business cycleFlorian Kuhn and Luis Chanci Economic Analysis and Policy, 2024, vol. 81, issue C, 801-817 Abstract: The resume audit literature provides strong evidence of discriminatory practices in hiring, raising critical concerns regarding equitable labor market outcomes. While the impacts of these practices on disparities in labor market levels are better understood, their cyclical effects are less known. In this paper, we research how hiring discrimination affects the volatility of labor market outcomes for disadvantaged groups by integrating empirical findings from audit studies into a search-and-matching model with a modified urn-ball matching function. Intuitively, in recessions, there are more applicants per job opening, which hurts discriminated groups. Applying this model to the U.S. economy, we find that it accounts for approximately 70% of the excess business cycle volatility in the unemployment rates of African Americans, as recorded in CPS data. Our research highlights the broader economic implications of discrimination, stressing the necessity for policy interventions, and offers a novel framework for future studies on labor market inequalities. Keywords: Unemployment; Discrimination; Business cycle (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:81:y:2024:i:c:p:801-817 DOI: 10.1016/j.eap.2023.12.027 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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