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Systemic Discrimination: Theory and Measurement

J. Aislinn Bohren (), Peter Hull () and Alex Imas ()
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J. Aislinn Bohren: University of Pennsylvania
Alex Imas: University of Chicago

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Economics tends to de?ne and measure discrimination as disparities stemming from the direct (causal) e?ects of protected group membership. But work in other ?elds notes that such measures are incomplete, as they can miss important systemic (i.e. indirect) channels. For example, racial disparities in criminal records due to discrimination in policing can lead to disparate outcomes for equally-quali?ed job applicants despite a race-neutral hiring rule. We develop new tools for modeling and measuring both direct and systemic forms of discrimination. We de?ne systemic discrimination as emerging from group-based di?erences in non-group characteristics, conditional on a measure of individual quali?cation. We formalize sources of systemic discrimination as disparities in signaling technologies and opportunities for skill development. Notably, standard tools for measuring direct discrimination, such as audit or correspondence studies, cannot detect systemic discrimination. We propose a measure of systemic discrimina-tion based on a novel decomposition of total discrimination—disparities that condition on underlying quali?cation—into direct and systemic components. This decomposition highlights the type of data needed to measure systemic discrimination and guides identi?cation strategies in both observational and (quasi-)experimental data. We illustrate these tools in two hiring experiments. Our ?ndings highlight how discrimination in one domain, due to either accurate beliefs or bias, can drive persistent disparities through systemic channels even when direct discrimination is eliminated.

Pages: 56 pages
Date: 2022-03-07
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