Ethnic and Racial Employment Discrimination in Low-Wage and High-Wage Markets: Randomized Controlled Trials Using Correspondence Tests in Israel

Abstract

Abstract A rich body of literature on employment discrimination exists. Theoretically, discriminatory practices are explained by taste-based discrimination, differences in the bargaining ability of applicants or statistical discrimination. Global experimental research tends to show significant anti-minority attitudes in the hiring process, specifically at the entry stage into the engagement cycle – when an application and resume are sent to the prospective employer. These field studies often employ “correspondence tests,” in which identical, fictitious resumes are sent to employers with differences only in the racial, gender, religious or national origin of the applicant (e.g., the name of the applicant). Yet, the literature is lacking in at least three areas: First, evidence from correspondence tests has primarily focused on middle-range wage earners, and little research exists on low-wage or high-wage earner positions. Second, research has looked at employment discrimination that excludes certain groups, but has neglected possible prejudice that “locks” such groups into unqualified or underpaid positions. Finally, there may also be a place-based effect – in which diverse communities are less discriminatory than more homogeneous communities, or vice versa. In this paper, we report on two population-level experiments with seven independent correspondence tests that were conducted in the Israel labor market, both designed to fill these three lags in the literature. We tested the likelihood of (a) Israeli-Arab lawyers versus Jewish lawyers being asked to job interviews at Israel’s largest law firms (n = 178); and (b) Mizrahi Jews versus Ashkenazi Jews being asked to job interviews, in any one of the registered security firms (n = 369). We compared which groups are more likely to be called for interviews and then meta-analyzed the results using standardized differences of means. Our findings suggest significant overall employment discrimination against both Arab-Israelis and Mizrahi Jews, whose applications are overall less likely to be both acknowledged by the prospective employers and asked for interview – despite the applicants having identical qualifications. However, we find that the effect in low-wage jobs is conditional on geographic location, with evidence to suggest that in some regions there is no preference toward either ethnicity. We find no support for a locking effect. We discuss the findings in the broader theoretical context, but suggest that a more granular application of the theory is called for, which takes into account community dynamics and the level of localized ethnic integration.