Experience-Based Discrimination

Louis-Pierre Lepage

American Economic Journal: Applied Economics, 2024, vol. 16, issue 4, 288-321

Abstract: I study discrimination arising from individual experiences of employers with worker groups. I present a model in which employers are uncertain about the productivity of one of two groups and learn through hiring. Positive experiences lead to positive biases, which correct themselves by leading to more hiring and learning. Negative experiences decrease hiring and learning, preserving negative biases, which can cause persistent discrimination. The model explains prejudice as incorrect statistical discrimination and generates novel predictions and policy implications. I then illustrate experience-based discrimination in an experimental labor market, finding support for key model predictions.

JEL-codes: D83 J23 J24 J31 J71 M51 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1257/app.20220466

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