Do Field Experiments on Labor and Housing Markets Overstate Discrimination? A Re-examination of the Evidence

Abstract

Since 2000, more than 80 field experiments across 23 countries consider the traditional dimensions of discrimination in labor and housing markets—such as discrimination based on race. These studies nearly always find evidence of discrimination against minorities. The estimates of discrimination in these studies can be biased, however, if there is differential variation in the unobservable determinants of productivity or in the quality of majority and minority groups. It is possible that this experimental literature as a whole overstates the evidence of discrimination. The authors re-assess the evidence from the 10 existing studies of discrimination that have sufficient information to correct for this bias. For the housing market studies, the estimated effect of discrimination is robust to this correction. For the labor market studies, by contrast, the evidence is less robust, as just over half of the estimates of discrimination fall to near zero, become statistically insignificant, or change sign.