Statistical Discrimination and Affirmative Action in the Lab

43 Pages Posted: 24 May 2018

See all articles by Ahrash Dianat

Ahrash Dianat

University of Essex - Department of Economics

Federico Echenique

California Institute of Technology - Division of the Humanities and Social Sciences

Leeat Yariv

Princeton University; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: May 2018

Abstract

We present results from laboratory experiments studying the impacts of affirmative action policies. We induce statistical discrimination in simple labor-market interactions between firms and workers. We then introduce affirmative-action policies that vary in the size and duration of a subsidy firms receive for hiring discriminated-against workers. These different affirmative-action policies have nearly the same effect and practically eliminate discriminatory hiring practices. However, once lifted, few positive effects remain and discrimination reverts to its initial levels. One exception is lengthy affirmative-action policies, which exhibit somewhat longer-lived effects. Stickiness of beliefs, which we elicit, helps explain the evolution of these outcomes.

Keywords: affirmative action, experiments, statistical discrimination

JEL Classification: C91, D04, J71

Suggested Citation

Dianat, Ahrash and Echenique, Federico and Yariv, Leeat, Statistical Discrimination and Affirmative Action in the Lab (May 2018). CEPR Discussion Paper No. DP12915, Available at SSRN: https://ssrn.com/abstract=3184222

Ahrash Dianat (Contact Author)

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Federico Echenique

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

313 Baxter Hall
Pasadena, CA 91125
United States

Leeat Yariv

Princeton University ( email )

Princeton, NJ 08544-1021
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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