Essays on discrimination in the marketplace
Abstract: This thesis is composed of four self-contained papers and focuses on discrimination in themarket place.Essay 1: “Disability Discrimination in the Rental Housing Market – A Field Experiment onBlind Tenants.” Although discrimination against disabled people has been investigated inthe labor market, the housing market has received less attention in this regard. This paperfocuses on the latter market and investigates whether blind tenants assisted by guide dogsare discriminated against in the rental housing market. The data are collected through afield experiment in which written applications were sent in response to onlineadvertisements posted by different types of advertisers. I find statistically significantevidence that one type of online advertiser, that is, the apartment owner (i.e., a person whoadvertises and rents out his/her own apartment(s) on his/her own), discriminates againstblind tenants, because of the presence of the guide dog, not because of the disability.According to the legislation, this behavior qualifies as illegal discrimination.Essay 2: “Does the design of correspondence studies influence the measurement of discrimination?”(co-authored with Carlsson and Rooth). Correspondence studies can identify the extent ofdiscrimination in hiring as typically defined by the law, which includes discriminationagainst ethnic minorities and females. However, as Heckman and Siegelman (1993) show,if employers act upon a group difference in the variance of unobserved variables, thismeasure of discrimination may not be very informative. This issue has essentially beenignored in the empirical literature until the recent methodological development byNeumark (2012). We apply Neumark’s method to a number of already publishedcorrespondence studies. We find the Heckman and Siegelman critique relevant forempirical work and give suggestions on how future correspondence studies may address thiscritique.Essay 3: “Does Labor Market Tightness Affect Ethnic Discrimination in Hiring?” (co-authoredwith Carlsson and Rooth). In this study, we investigate whether ethnic discriminationdepends on labor market tightness. While ranking models predict a negative relationship,the prediction of screening models is ambiguous about the direction of the relationship.Thus, the direction of the relationship is purely an empirical issue. We utilize three (butcombine into two) correspondence studies of the Swedish labor market and two distinctlydifferent measures of labor market tightness. These different measures produce very similarresults, showing that a one percent increase in labor market tightness increases ethnicdiscrimination in hiring by 0.5-0.7 percent, which is consistent with a screening model.This result stands in sharp contrast to the only previous study on this matter, Baert et al.(forthcoming), which finds evidence that supports a ranking model.Essay 4: “Relative Age Effect on Labor Market Outcomes for High Skilled Workers – Evidencefrom Soccer.” In sports and education contexts, children are divided into age groups that arearbitrary constructions based on admission dates. This age-group system is thought todetermine differences in maturity between pupils within the same group, that is, relative904627 Luca Furmaco_inl.indd 5 2015-02-24 16:58age (RA). In turn, these within-age-group maturity differences produce performance gaps,that is, relative age effects (RAEs), which might persist and affect labor market outcomes. Ianalyze the RAE on labor market outcomes using a unique dataset of a particular group ofhigh-skilled workers: soccer players in the Italian major soccer league. In line with previousstudies, evidence on the existence of an RAE in terms of representativeness is found,meaning that players born relatively early in an age group are over-represented, whileplayers born relatively late are under-represented, even accounting for specific populationtrends. Moreover, players born relatively late in an age group receive lower gross wages thanplayers born relatively early. This wage gap seems to increase with age and in the quantileof the wage distribution.
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