Discrimination is a complex, multi-factor phenomenon. Evidence shows widespread discrimination on various grounds, including ethnic origin, sexual orientation, gender identity, religion or beliefs, disability, being over 55 years old, or being a woman. It is not only unfair and potentially costly to the individuals who experience it, but also results in large economic costs for society.
Labor market discrimination based on physical attributes, for example, is widespread. Obese people are less likely to be employed and, when employed, are likely to earn lower wages; physically attractive people, on the other hand, earn more than those considered to be less attractive; and looks can even be pivotal in national elections. But, identifying discriminatory practices in the labor market is not an easy task. Anti-discrimination policies and blind recruitment methods can help in the fight to make workplaces more equal, but there is still a long way to go.
Eliminating discrimination in hiring isn’t enough
Firms interested in workplace diversity should consider the post-hiring stage and why some minority employees choose to leaveMackenzie Alston, May 2023While many firms have recognized the importance of recruiting and hiring diverse job applicants, they should also pay attention to the challenges newly hired diverse candidates may face after entering the company. It is possible that they are being assessed by unequal or unequitable standards compared to their colleagues, and they may not have sufficient access to opportunities and resources that would benefit them. These disparities could affect the career trajectory, performance, satisfaction, and retention of minority employees. Potential solutions include randomizing task assignments and creating inclusive networking and support opportunities.MoreLess
Does it pay to be beautiful? Updated
Physically attractive people can earn more, particularly in customer-facing jobs, and the rewards for men are higher than for womenEva SierminskaKaran Singhal, March 2023It is a well-established view amongst economists that good-looking people have a better chance of employment and can earn more than those who are less physically attractive. A “beauty premium” is particularly apparent in jobs where there is a productivity gain associated with good looks, though this varies for women and men, and varies across countries. People sort into occupations according to the relative returns to their physical and other characteristics; good-looking people take jobs where physical appearance is deemed important while less-attractive people steer away from them, or they are required to be more productive for the same wage.MoreLess
Disability and labor market outcomes Updated
Disability is associated with labor market disadvantage; evidence points to this being a causal relationshipMelanie Jones, March 2021In Europe, about one in eight people of working age report having a disability; that is, a long-term limiting health condition. Despite the introduction of a range of legislative and policy initiatives designed to eliminate discrimination and facilitate retention of and entry into work, disability is associated with substantial and enduring labor market disadvantage in many countries. Identifying the reasons for this is complex, but critical to determine effective policy solutions that reduce the extent, and social and economic costs, of disability-related disadvantage.MoreLess
Correspondence testing studies Updated
What is there to learn about discrimination in hiring?Dan-Olof Rooth, January 2021Anti-discrimination policies play an important role in public discussions. However, identifying discriminatory practices in the labor market is not an easy task. Correspondence testing provides a credible way to reveal discrimination in hiring and provide hard facts for policies, and it has provided evidence of discrimination in hiring across almost all continents except Africa. The method involves sending matched pairs of identical job applications to employers posting jobs—the only difference being a characteristic that signals membership to a group.MoreLess
Racial wage differentials in developed countries Updated
The variation of racial wage gaps across and within groups requires differing policy solutionsSimonetta Longhi, October 2020In many developed countries, racial and ethnic minorities are paid, on average, less than the native white majority. While racial wage differentials are partly the result of immigration, they also persist for racial minorities of second and further generations. Eliminating racial wage differentials and promoting equal opportunities among citizens with different racial backgrounds is an important social policy goal. Inequalities resulting from differences in opportunities lead to a waste of talent for those who cannot reach their potential and to a waste of resources if some people cannot contribute fully to society.MoreLess
Equal pay legislation and the gender wage gap Updated
Despite major efforts at equal pay legislation, gender pay inequality still exists—how can this be put right?Solomon W. Polachek, October 2019Despite equal pay legislation dating back 50 years, American women still earn 18% less than their male counterparts. In the UK, with its Equal Pay Act of 1970, and France, which legislated in 1972, the gap is 17% and 10% respectively, and in Australia it remains around 14%. Interestingly, the gender pay gap is relatively small for the young but increases as men and women grow older. Similarly, it is large when comparing married men and women, but smaller for singles. Just what can explain these wage patterns? And what can governments do to speed up wage convergence to close the gender pay gap? Clearly, the gender pay gap continues to be an important policy issue.MoreLess