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The Annals of Regional Science

Erschienen in:

30.04.2023 | Original Paper

Cyclical behavior of hiring discrimination: evidence from repeated experiments in France

verfasst von: Laetitia Challe, Yannick L’Horty, Pascale Petit, François-Charles Wolff

Erschienen in: The Annals of Regional Science | Ausgabe 3/2024

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Abstract

Our objective is to investigate if hiring discrimination in France has a cyclical nature using an innovative set of repeated correspondence tests. The methodology covers one type of job only, that of administrative manager, in both the private and public sectors, and two discrimination criteria, ethnic origin and place of residence. The empirical analysis is based on five waves of tests starting in 2015, covering the periods before, during, and after the first lockdown, with 4749 applications sent for 1583 job openings in total. Our results indicate that hiring discrimination based on the dual criteria of origin and place of residence has decreased in France since the mid-2010s, within the context of an improved labor market, but that it increased sharply during the Covid health crisis, in recessionary conditions, suggesting that it generally follows a counter-cyclical behavior. Overall, the temporal patterns of discrimination, as measured by callback rates, mirror those of the unemployment rate.

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As the term QPV is not necessarily familiar to all employers, we made sure to highlight where the candidate was from by including a building name in his address of residence—names such as “Immeuble Pavillon” or “Tour Nord” which unambiguously suggests a residence in one of the modern suburban low-rent housing complexes that are synonymous with deprived neighborhoods in France.

The unemployment halo, which groups together unemployed people who wish to work but who do not meet the ILO criteria for job search or availability to be considered unemployed, increased significantly in 2020. Over the year, it concerned an average of 4.6% of people aged 15–64, an increase of 0.8 percentage points over one year. The increase was particularly marked in the second quarter of 2020, during the first lockdown, with + 2.2 points (Insee, French Statistics Institute).

Here, we favor the Arrow-Phelps interpretation of the information discrimination channel. The Becker’s preference discrimination channel may also allow us to establish a link between discrimination and the business cycle. In periods of recession when firms' margins are at their lowest, the additional costs borne by discriminating firms should accelerate their failure. According to this mechanism, discrimination should reduce during a recession and be pro-cyclical overall. However, the central prediction of Becker's model that discriminating firms are pushed out of the market in the long run assumes a framework of perfect competition. It is not verified in the more realistic case of imperfect competition, or even in the case where each firm forms a monopsony giving it market power over the candidates seeking recruitment (Manning 2003).

No discrimination is possible if the offer is a widely publicized open position. There could still be discrimination if the announcement has not been circulated to potential candidates.

This is the only mention of the economic cycle in this comprehensive literature review.

The risk of discrimination is never nil according to the results of discrimination tests carried out in France for these qualified professions (see for instance Duguet et al. 2013).

Category A claimants are not working at all, while category B claimants worked up to 78 h per month, i.e., more than half time. Category C applicants were employed for more than 78 h per month.

The eight departements of the Ile de France region are: Paris (75), Seine-et-Marne (77), Yvelines (78), Essonne (91), Hauts de Seine (92), Seine-Saint-Denis (93), Val-de-Marne (94), Val d’Oise (95). In Seine-et-Marne, the largest département in Ile-de-France, we used two sets of three candidates, one for the north of the département and the other for the south.

These sources include Publidia, Emploi FHF, RDV Emploi public, Emploi collectivité, La Gazette des Communes, Emploi public, Place de l’Emploi Public, Cap Territorial, and Pôle Emploi.

See note 1.

Some examples of locations used in poor neighbourhoods: Boulevard Barbès, 75,018 Paris; Bât Sud, 33 rue de la grande borne 91,350 Grigny; Carreaux 2, 21 Rue Scribe, 95,400 Villiers-le-Bel; Tour Nord, Rue des Hautes Bornes, 94,600 Choisy-le-Roi.

Sending multiple applications to the same firm could drive induced competition (see Larsen 2020). We are not able to take this potential effect into account as we do not observe the other applications sent to the offers we responded to with our fictitious candidates.

Size of the company is not a covariate used in our model because of the difficulty in finding this information, especially for small companies. We suspect there may be large missing values for this variable. Moreover, Baert et al. (2018) find no evidence of an association between firm size and hiring discrimination. On the other hand, the authors do find suggestive evidence that hiring discrimination is lower in public and non-profit firms (compared to commercial firms).

We have also estimated linear probability models and get very similar results.

“Emplois Francs” (EF) is a new public policy in France implemented since April 2018 in nearly 200 districts that provides financial assistance to companies when they hire a jobseeker living in a disadvantaged neighborhood (named QPV for “Quartier Prioritaire de la Ville”). After an initial experimental phase, the “Emplois Francs” scheme has been extended to all QPVs since 1st January 2020. The name of the policy has no direct translation in English.

Pôle Emploi is the French national employment agency. We considered all jobseekers in categories A, B, and C to correspond to registered jobseekers whether or not they are in reduced activity, as long as they are immediately available to take up employment.

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Titel: Cyclical behavior of hiring discrimination: evidence from repeated experiments in France
verfasst von: Laetitia Challe
Yannick L’Horty
Pascale Petit
François-Charles Wolff
Publikationsdatum: 30.04.2023
Verlag: Springer Berlin Heidelberg
Erschienen in: The Annals of Regional Science / Ausgabe 3/2024
Print ISSN: 0570-1864
Elektronische ISSN: 1432-0592
DOI: https://doi.org/10.1007/s00168-023-01217-2

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