Doctoral Dissertation Research Improvement in Economics: Supply-Side Responses to Discrimination

This award is funded in whole or in part under the American Rescue Plan Act of 2021 (Public Law 117-2).

This project will investigate how people respond to actual and anticipated discrimination. Literature on discrimination in economics has primarily focused on evaluating whether and how employers discriminate against employees. Substantially less research has investigated how employees respond to discrimination, and whether they may actively avoid situations in which they anticipate being discriminated against.

These responses may be important drivers of the underrepresentation of women in male-dominated high paying jobs. In the first set of projects, the authors will conduct a series of laboratory experiments in which subjects face choices over working in different environments. These environments differ based on whether they have rules that discriminate against certain groups of subjects.

By eliciting subjects’ preferences over these environments, the researchers will evaluate whether subjects are willing to give up money to avoid facing discrimination. In the second set of projects, the researchers will investigate people’s beliefs about potential signals of discrimination in the labor market and how these beliefs affect their choices.

Together, these projects will provide insight into the role that beliefs about and responses to discrimination may play in the persistence of wage gaps in the labor market.

In this project, the researchers will investigate the role that discrimination anticipation plays in the labor market, and how providing information about signals of discrimination affects workers' choices and beliefs. The emphasis for much of the economics literature on discrimination has been placed on the role of the employer. Theoretical papers have shown that supply-side (employee) perceptions of discrimination may play a crucial role in the persistence and exacerbation of group-level wage gaps (Coate and Loury, 1993; Lang et al, 2005).

Yet, empirical research on the relevance and role of discrimination anticipation among employees is limited. In this project, the researchers will conduct a series of experiments to examine the role of supply-side anticipation of discrimination in the labor market. In the first study, the researchers will run a laboratory experiment to test whether individuals are averse to discriminatory environments.

That is, are subjects willing to forego profits in order to avoid facing discrimination? Literature on fairness suggests that individuals may be averse to discriminatory rules, but this theory has not been directly tested. Evidence of discrimination aversion would provide theoretical insight into mechanisms leading to wage gaps, which may be masked as preferences.

In the second study, the researchers will run an information experiment to investigate beliefs about a signal of potential discrimination in the labor market and to analyze how people respond to information about this signal. Together, these studies have the potential to provide a more holistic view of the theoretical and empirical role of discrimination, through supply-side anticipation of discrimination.

This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.