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Capabilities, Competition and Innovation Seminars

Task Based Discrimination

Yona Rubinstein (CEP, LSE), joint with Erik Hurst and Kazuatsu Shimizu

Thursday 19 November 2020 14:15 - 15:30


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About this event

We introduce a new model of task based discrimination to understand the evolution of the racial wage gap since 1960. We highlight a new task measure - Contact tasks - which measures the extent to which individuals interact with others as part of their job. Using detailed micro data, we document that conditional on education, there were large racial gaps in both the Abstract and Contact task contents of jobs in 1960. By 2018, the racial gaps in the Contact tasks was essentially eliminated while the Abstract gap still remained large. We then develop a model that embeds racial differences in a vector of skills and notions of both statistical and taste-based discrimination into a task based model of occupational choice. Using detailed micro data, we calibrate and estimate the model. We find that measures of taste-based discrimination have fallen sharply over the last sixty years. We also find sizeable racial gaps in the skills that correspond to Abstract tasks in all years. Finally, we document that increasing returns to Abstract skills have contributed substantively to the stagnation of the racial wage gap since 1980. In particular, we find that Black-white wage gaps would have shrunk by 7 percentage points in 2018 if Abstract task based returns were held at their 1980 levels, all else equal. We conclude that a task based approach yields important insights with respect to understanding the sources underlying the evolution of racial wage gaps.

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This series is part of the CEP's Growth programme.