A study that shows the true stupidity of discrimination.

The economic mysteries of daily life.
Feb. 2 2008 7:39 AM

Amazing Racism

A study that shows the true stupidity of discrimination.

Hillary Clinton and Barack Obama notwithstanding, the world still seems to be ruled by white men. Is this the result of racial and sexual discrimination in the workplace? Or are other factors more important—for instance, that too few black kids attend good schools, or that women usually interrupt their careers to have children? The answer is far from academic, because if we want to change a situation, it's a good idea to work out what might be behind it.

Economists have been leading this investigation for longer than one might think. Contrary to popular belief, "the dismal science" did not acquire its name because of Thomas Malthus' gloomy predictions. The title was bestowed upon us in 1849 by Thomas Carlyle, who attacked John Stuart Mill and his fellow political economists for their "dismal" support for emancipation, and their insistence that former slaves, women, even the Irish, were all equal.

Advertisement

More recently, economists have turned their attention to the subtler question of how to detect discrimination in labor markets. That women or racial minorities are paid less suggests discrimination but does not prove it, even if the statisticians make every effort to adjust for other differences such as part-time work or different choices of jobs.

One solution to the ambiguity is a random audit. A recent example was carried out by economists Sendhil Mullainathan and Marianne Bertrand. They generated about 5,000 fake job applications and used a computer to add, at random, distinctively black or white names. The employers who received the applications systematically favored the Gregs and the Emilys over the LaTonyas and the Jamals. Perhaps even more perniciously, they paid attention to the qualifications of (apparently) white applicants, but did not notice the difference between mediocre black applicants and excellent ones.

But discrimination should also show up in another way. Employers who prefer not to employ workers because of their sex or the color of their skin are likely to lose money: Employing stupid white men when you could be employing smart black women is not a profitable human-resources policy. Employers might nevertheless do this, either because they do not realize that their prejudices are costing them money, or because they do not care. If so, discrimination is easy to detect in principle: Just note that the profitable firms will be the ones employing more women or workers from an ethnic minority.

Economist Stefan Szymanski realized that the English soccer league was a perfect testing ground for this hypothesis. There was excellent data available as to which clubs employed black players; soccer has a very clear measure of success, and unlike some sports leagues, the English game does not go in much for redistributing money from successful clubs to minnows.

Szymanski studied the game between 1978 and 1993, a time encapsulated by the image of Liverpool's Jamaican-born star, John Barnes, backheeling away a banana that had been hurled at him from the stands. But Szymanski's numbers suggest that it was the owners, not the fans, who were the worst offenders. Clubs that bucked the norm and fielded several black players did not suffer lower attendance or revenues as a result. But they did enjoy a higher league position with a lower wage bill than the typical club—clear evidence that black players were underpaid on racial grounds.

As soccer has become ever more competitive and the financial stakes have become higher, racial discrimination has become more expensive. I note that many more black players now play in the top division of British soccer. That is good news; it's also no coincidence.

If only competition was as fierce, and talent as undeniable, in the world outside the stadium gates.

Tim Harford is a Financial Times columnist. His latest book, The Logic of Life, will be published in paperback on Feb. 10.

TODAY IN SLATE

The Slatest

Ben Bradlee Dead at 93

The legendary Washington Post editor presided over the paper’s Watergate coverage.

This Scene From All The President’s Men Captures Ben Bradlee’s Genius

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Whole Foods Is Desperate for Customers to Feel Warm and Fuzzy Again

The XX Factor

I’m 25. I Have $250.03.

My doctors want me to freeze my eggs.

The XX Factor
Oct. 20 2014 6:17 PM I’m 25. I Have $250.03. My doctors want me to freeze my eggs.
Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

George Tiller’s Murderer Threatens Another Abortion Provider, Claims Free Speech

The Congressional Republican Digging Through Scientists’ Grant Proposals

  News & Politics
The World
Oct. 21 2014 3:13 PM Why Countries Make Human Rights Pledges They Have No Intention of Honoring
  Business
Moneybox
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
  Life
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 20 2014 1:10 PM Women Are Still Losing Jobs for Getting Pregnant
  Slate Plus
Behind the Scenes
Oct. 21 2014 1:02 PM Where Are Slate Plus Members From? This Weird Cartogram Explains. A weird-looking cartogram of Slate Plus memberships by state.
  Arts
Behold
Oct. 21 2014 12:05 PM Same-Sex Couples at Home With Themselves in 1980s America
  Technology
Technology
Oct. 21 2014 11:44 PM Driving in Circles The autonomous Google car may never actually happen.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.