Equal Opportunity Policies Lecture 23

1. Equal Opportunity PoliciesLecture 23 Today’s Reading Schiller Ch. 15-Equal Opportunity Policies DeParle, Raising Kevion, eReserves

2. Today’s Topics • What is racial discrimination? • How can we identify discrimination as the cause of racial disparities?\ • What policies have been implemented to reduce discrimination? • Have these policies been effective

3. Today’s Sources • Roberta Spalter-Roth and Terri Ann Lowenthal, “Race, Ethnicity, and the American Labor Market: What’s at Work?” American Sociological Association Series on How Race and Ethnicity Matter, June 2005 http://www2.asanet.org/centennial/race_ethnicity_labormarket.pdf • National Academy of Sciences, Measuring Racial Discrimination (2004), http://darwin.nap.edu/books/0309091268/html

4. Examples of Racial Disparities • Labor Markets • Wages • Employment and unemployment • Occupational distribution • Criminal Justice • Education • Health Care • Housing/Mortgage Lending

5. Source: Spatler-Roth and Lowenthal, 2005

6. Source: Spatler-Roth and Lowenthal, 2005

7. Source: Spatler-Roth and Lowenthal, 2005

8. What is racial discrimination? • Differential treatment on the basis of race that disadvantages a racial group, • a person is not hired for a job because of his or her race • Treatment on the basis of inadequately justified factors other than race that disadvantages a racial group • An employer uses a test in selecting job applicants that is not a good predictor of performance and results in proportionately fewer job offers being extended to members of disadvantaged racial groups compared with whites Source:National Academy of Sciences, 2004

9. Measuring racial discrimination • “ Although there is substantial direct empirical evidence for the prevalence of large disparities among racial and ethnic groups in various domains, it is often difficult to obtain direct evidence of whether and to what extent discrimination may be a contributing factor.” (National Academy of Sciences, p. 16)

10. Measuring racial discrimination, cont. • Racial disparities≠discrimination • Other factors make contribute to racial differences • Family composition and socioeconomic status • Pace of economic growth • the changing structure of industry • globalization of markets • Barriers to educational opportunities

11. Measuring racial discrimination, cont. • Conclusion:No single approach to measuring racial discrimination allows researchers to address all the important measurement issues or to answer all the questions of interest. Consistent patterns of results across studies and different approaches tend to provide the strongest argument. Public and private agencies--including the National Science Foundation, the National Institutes of Health, and private foundations--and the research community should embrace a multidisciplinary, multimethod approach to the measurement of racial discrimination and seek improvements in all major methods employed.(National Academy of Sciences, pp. 5-6)

12. Answering the Counterfactual Question • Infer the presence of discrimination by trying to determine whether an observed adverse outcome for an individual would have been different had the individual been of a different race. • Attempt to answer the following counterfactual question: What would have happened to a nonwhite individual if he or she had been white?(NAS, p. 5)

13. 4 Major Methods of Measuring Discrimination • Statistical analysis of observational data and natural experiments • Laboratory experiments • Field experiments (audits) • analysis of survey and administrative record reports

14. Statistical analysis of observational data and natural experiments • Decomposition of wage differentials • What portion of the wage gap is due to human capital factors? • Another way to state this is to ask what portion of the wage gap is due to differences in productivity? • Look for differences in education, training, and experience. • The portion of the wage gap not explained by these differences is attributed to discrimination.

15. How much of the wage gaps are explained by decomposition of wage differentials? • White-Black Wage Gap • Hyclak et al. assert thatnoneof the wage gapbetween white and minority workers is due todiscrimination! Schiller reports that one-fourth of the wage gap is due to discriminatory labor practices (p. 194). • This implies that human capital differences explain ¾ to all of the Black/White wage gap.

16. Decomposition of wage differentials • Conclusion:The statistical decomposition of racial gaps in social outcomes using multivariate regression and related techniques is a valuable tool for understanding the sources of racial differences. However, such decompositions using data sets with limited numbers of explanatory variables, such as the Current Population Survey or the decennial census, do not accurately measure the portion of those differences that is due to current discrimination. Matching and related techniques provide a useful alternative to race gap decompositions based on multivariate regression in some circumstances. (NAS, p. 8)

17. Laboratory Experiments • Definition: “. . . a stimulus can be administered to research participants in a controlled environment and in which participants can be randomly assigned to an experimental condition or another (e.g., control) condition provides the best approach for inferring causation between a stimulus and a response. Such experiments come closest to addressing the above counterfactual question.” (NAS, p. 6)

18. Laboratory Experiments • The major contributions of laboratory experiments are to identify those situations in which discriminatory attitudes and behaviors are more or less likely to occur, as well as the characteristics of people who are more or less likely to exhibit discriminatory attitudes and behaviors, and to provide models of peopleﾕs mental processes that may lead to racial discrimination. (NAS, p.6)

19. Laboratory Experiments • Recommendation: To enhance the contribution of laboratory experiments to measuring racial discrimination, public and private funding agencies and researchers should give priority to the following:

20. Laboratory Experiments:Recommendations, cont. • Laboratory experiments that examine not only racially discriminatory attitudes but also discriminatory behavior. The results of such experiments could provide the theoretical basis for more accurate and complete statistical models of racial discrimination fit to observational data. • Studies designed to test whether the results of laboratory experiments can be replicated in real-word settings with real-world data. Such studies can help establish the general applicability of laboratory findings. (NAS, p. 6)

21. Laboratory Experiments:Limitations • Laboratory experiments have uncovered many subtle yet powerful psychological mechanisms through which racial bias exists. Yet regardless of how well designed and executed they are, laboratory experiments cannot by themselves directly address how much race-based discrimination against disadvantaged groups contributes to adverse outcomes for those groups in society at large. (NAS, p. 6)

22. Field Experiments (Audits)Definition • Large-scale experiments in the field that rely on random assignment of subjects to one or more experimental treatments or to no treatment • Otherwise comparable pairs of, say, a black person and a white person are sent separately into the market • housing, specifically seeking new apartments or houses. • job seeking

23. Field Experiments (Audits), Cont. • Disadvantages • take longer • more complex to manage • more costly to conduct than laboratory experiments • their results are more easily confounded by factors in the environment that the researchers cannot control. • Advantage • their results can be generalized more readily to the population at large.

24. Field Experiments: Audits, Cont. • Recommendation: Nationwide field audit studies of racially based housing discrimination, such as those implemented by the U.S. Department of Housing and Urban Development in 1977, 1989, and 2000, provide valuable data and should be continued. • Recommendation: Because properly designed and executed field audit studies can provide an important and useful means of measuring discrimination in various domains, public and private funding agencies should explore appropriately designed experiments for this purpose. (NAS, p. 7)

25. Indicators of Discrimination from Surveys and Administrative Records • Definition:Self-reports of racial attitudes and perceived experiences of discrimination in surveys and reports of discriminatory events in administrative records • Usefulness: Longitudinal and repeated cross-sectional data, including continuous and new measures, are important to illuminate trends and changes in patterns of racially discriminatory attitudes and behaviors among and toward various groups. Such data are also vital for studies of cumulative disadvantage. (NAS, p. 9)

26. Indicators of Discrimination from Surveys and Administrative Records, cont. • Limitations: Survey data typically cannot directly measure the prevalence of actual discrimination as opposed to reports of perceived discrimination, but they can provide useful supporting evidence.(NAS, p. 9)

27. What policies have we used to combat market discrimination? • executive orders and legislation designed to guarantee equal employment opportunity policies • Office of Federal Contract Compliance Programs (OFCCP) • Equal Employment Opportunity Commission (EEOC) • affirmative action such as quotas and guidelines

28. Have the equal employment and equal education policies employed in the past been effective? • Do they achieve their goals? • Do the costs outweigh the benefits? • What is the opportunity cost of affirmative action? • Do we get the biggest bang for our buck with affirmative action policies? Are they the best remedy? • Should we continue to use affirmative action policies? Will they perform in the future as in the past? • Should their use be increased? Is their relationship with employment linear? nonlinear?

29. Are there new policies we should consider? • Reduce discrimination? • Class-based affirmative action? • Others? • Increase educational access? • Offset or compensate for the effects of globalization? • Alter the structure of industry so as to increase opportunities for all? • Increase the rate of economic growth? • Stabilize families?

30. Results of Evaluations • Local goals. Jonathan Leonard: minority employment has risen as a direct and indirect result of affirmative action initiatives. (Schiller, p. 277) • Global goals. Progress in eliminating discrimination has not gone hand in hand with reduction in inequality: it has only reshuffled winners and loser in the competition. . . . Changing the rules governing the competition of wealth and status does nothing to change the structure of the market economy and the rewards that flow from it. (Isabel Sawhill and Daniel McMurrer, American Dreams and Discontents: Beyond the Level Playing Field, The Urban Institute http://www.urban.org/publications/306773.html )