Evidence on Discrimination in Employment: Codes of Color, Codes of Gender

There is substantial racial and gender disparity in the American economy. As we will demonstrate, discriminatory treatment within the labor market is a major cause of this inequality. The evidence is ubiquitous: careful research studies that estimate wage and employment regressions, help-wanted advertisements, audit and correspondence studies, and discrimination suits that are often reported by the news media. Yet, there appear to have been periods of substantial reductions in economic disparity and discrimination. For example, Donohue and Heckman provide evidence that racial discrimination declined during 1965–1975.1 Gottschalk has produced statistical estimates that indicate that discrimination against black males dropped most sharply between 1965 and 1975, and that discrimination against women declined during the interval 1973–1994.2 But some unanswered questions remain. Why did the movement toward racial equality stagnate and eventually decline after the mid-1970s? What factors are most responsible for the remaining gender inequality? What is the role of the competitive process in the elimination or reproduction of discrimination in employment?