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Which Wage Distributions are Consistent with Statistical Discrimination?

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  • Deb, Rahul
  • Renou, Ludovic

Abstract

We derive a non-parametric test for statistical discrimination that can be applied to cross-sectional wage data. Specifically, we show that the wage distributions for two groups (with identical observable characteristics) are consistent with a general reduced-form model of statistical discrimination if, and only if, neither wage distribution first-order stochastically dominates the other. Our model allows us to interpret a rejection of this condition as evidence of bias.

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  • Deb, Rahul & Renou, Ludovic, 2022. "Which Wage Distributions are Consistent with Statistical Discrimination?," CEPR Discussion Papers 17676, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17676
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