Studying Discrimination: Fundamental Challenges and Recent Progress

Abstract

We discuss research on discrimination against blacks and other racial minorities in labor market outcomes, highlighting fundamental challenges faced by empirical work in this area. Specifically, for work devoted to measuring whether and how much discrimination exists, we discuss how the absence of relevant data, the potential noncomparability of blacks and whites, and various conceptual concerns peculiar to race may frustrate or render impossible the application of empirical methods used in other areas of study. For work seeking to arbitrate empirically between the two main alternative theoretical explanations for such discrimination as it exists, we distinguish between indirect analyses, which do not directly study the variation in prejudice or the variation in information, the mechanisms at the heart of the two types of models we review, and direct analyses, which are more recent and much less common. We highlight problems with both approaches. Throughout, we discuss recent work, which, the various challenges notwithstanding, permits tentative conclusions about discrimination. We conclude by pointing to areas that might be fruitful avenues for future investigation.