Discrimination in Modern Labor Markets: A Field Experiment

The results showed a 50 percent lower callback rate for black Americans compared to white Americans

Daniel Nam


Scholarcy highlights

  • As we enter what many calls the ‘Fourth Industrial Revolution,’ 2 big data and the algorithms that manipulate them have unleashed a wave of dramatic changes on the economy and society
  • Research done by Jobscan, a recruitment solutions company shows that 98.8 percent of the Fortune 500 companies use applicant tracking systems – software that collects data from submitted resumes and automatically filters them through algorithms to make hiring decisions
  • While racial discrimination has not been eliminated in the hiring process, there is a possibility that the effects of social changes pressured, or inspired, employers to make changes to their algorithms, leading to a relatively even positive callback distribution amongst the applicants from the two racial groups
  • In this paper, I conducted a correspondence study to determine whether ATS used in the hiring process racially discriminate
  • I do not find evidence of racial discrimination in this preliminary study. This is a result of employers reacting to increasing conversations about systematic racism in the United States
  • There was no difference in callback rate between candidates of different racial groups. In both cases, the p-value for the percentage point difference was high, which once again shows that there is no significant difference in callback rates between races
  • The results could stem from the elongation of the hiring process as a result of the time saying from adopting ATS and other algorithms in the hiring process
  • The initial resume evaluation process may be less significant than in the past

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