Labour Market Analysis

  Order Description   Empirical analyses of labour market outcomes often include dummy variables that indicate the race of an individual. It is often found that racial minorities experience labour market outcomes that are significantly inferior to those enjoyed by individuals with otherwise identical measured characteristics. A common interpretation of these results is that racial discrimination exists at the point where hiring decisions are made. An alternative interpretation is that studies based on observational data often omit relevant variables that may be correlated with race, and are therefore affected by endogeneity. For example, in some cases, racial minorities may have relatively restricted access to high-quality schools. Regression analyses that omit measures of school quality may, therefore, produce misleading results. The design of effective equal opportunity policies requires an understanding of the precise nature of discrimination but, unfortunately, the instruments required to identify the relevant parameters may be difficult to find. An alternative analytical approach to investigating discrimination in labour markets is to conduct an experiment in which the characteristics of job applicants are controlled by the experimenter and may, therefore, be made exogenous by construction.     Use econometric techniques to determine whether employers in Chicago and Boston discriminated on the basis of race in their hiring practices when choosing between otherwise similar candidates. If you find evidence of racial discrimination then you should provide an estimate of its extent and a measure of the uncertainty of your estimate. Is there is any evidence that the extent of any discrimination that exists differs between firms in Boston and firms in Chicago? Is there any evidence that the extent of any discrimination that exists differs between firms that claim to be an equal opportunity employer and firms that do not?