A Dull Knife Still Cuts Deeply: Ethnic Bias and Wage Inequality

• In Event: 1184 - Section on Organizations, Occupations, and Work Refereed Roundtable Session
  In Refereed Roundtable 100min: Table 17. Race and Ethnicity at Work

Abstract

Laboratory and audit studies show that majority group members are biased against ethnic and racial minorities and treat them less favorably in interpersonal interactions and in the hiring interface. However, there is little evidence to link the bias and discrimination researchers observe in lab and audit studies to wage inequality. “Bias skeptics” point out that even if some people are biased, members of minority groups may be able to avoid biased workplaces; and even if minority group members cannot avoid biased employers, bureaucratic rules and norms of cooperation and equal treatment may restrain employers’ and coworkers’ tendency to discriminate, especially in post-hire decision making. This study supplies new evidence on the relationship between bias in the workplace and wage inequality. Using survey experimental techniques, I measure bias among white-collar employees at twelve major Japanese firms, and test whether greater bias against foreign minorities of different national backgrounds is associated with higher levels of wage inequality, all else equal. I find that inequality is greater when coworkers are more biased. The results suggest that a) even when minorities are few in number, they do not (or likely cannot) avoid working with biased coworkers; and that b) bureaucratic rules and interpersonal processes in the workplace do not prevent coworkers’ biases from impacting minorities’ earnings.

Author

• Hilary J. Holbrow, Harvard University