Thursday, 15 November 2012

Discrimination in labour markets: evidence from Italy

Of all topics in economics discrimination in the labour market maybe one of the most studied but it is also one of the least understood. Part of the problem when looking at the adverse labour-market outcomes of certain categories of workers (for example, ethnic minorities or women), it is very difficult to disentangle the effects of  discrimination and other often-unobserved aspects such as low ability or social norms and peer effects.

Eleonora Patacchini, Giuseppe Ragusa and Yves Zenou examine this topic using data from a study which utilised the sending of fictitious résumés to real help-wanted ads in Rome and Milan. Their results are summarised in a column at They were looking at the effects of homosexuality and beauty on labour markets outcomes.

Patacchini, Ragusa and Zenou write,
We experimentally manipulate 'perceived homosexuality' by randomly modifying résumés by adding items that reveal sexual preferences. At the same time, we randomly attach to the résumés a picture of the candidate where these pictures have been previously ranked in terms of beauty. We restrict the field experiment to seven occupations, the most frequent ones that do not require specific skills, i.e. administrative clerk, bookkeeper, call-centre operator, receptionist, sales clerk, secretary and shop assistant.
They continue,
The experiment started on 17 January 2012 and ended on 21 February 2012. During this period, for each city and occupation, we selected the most recent employment ads published in two websites, Job Rapido and Monster. They are the most popular websites among actual jobseekers. We answered to 531 ads, 336 in Milan and 195 in Rome. We typically sent four résumés in response to each ad, two from the treatment group and two from the control group. We sent 2,320 résumés in total.

The overall response rate was about 11%, with a minor difference between males and females (10.83% and 11.24%, respectively). Looking at the percentages by city, the response rate was higher in Rome (about 16%), where men were more likely to be called back than women (17.48% versus 14.96%). On the contrary, in Milan, the overall response was roughly divided by two (about 8%) and men were less likely to be called back than women (7.19% versus 9.10%).
We find that there is a statistically significant penalty (in terms of callback rates) associated to gay men of about 3% whereas gay women do not seem to show a significant difference in callback rate with respect to straight women. The 3% penalty for gay men is quite high since the callback rate for males is 10%, which means that compared to gay men, they have 30% less chance to be called back.

We also investigate whether the penalty associated with gay people is mitigated for high-skilled individuals. Interestingly, we find the opposite result. The penalty is actually higher for high-skilled gay people, with an associated magnitude of more than 8% for gay men. No penalty or premium is instead associated to high-skilled lesbians, confirming that only men are penalised in the labour market for their sexual orientation.

When we instead look at differences in response rates by picture beauty, our analysis indicates a significant premium for attractive women of about 2% and no significance difference between handsome and ugly men. We then investigate whether the beauty premium for women varies by skills. We find that high-skilled attractive women are called back less often than low-skilled attractive women. This may indicate that beauty might not be an advantage for high-skilled women.
So the results suggest the existence of discrimination against gay men and the less attractive female workers. The fact that high-skilled pretty women obtain less beauty premium than low-skilled pretty women may indicate the fear of competition with these women for certain types of jobs. Importantly, the results show that the beauty results are particularly relevant for occupations requiring the interaction with customers as secretaries, receptionists and general customer service.

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