• Nazarbayev University

• ECON 328

ECON 328: LABOR ECONOMICS Assignment 5 1. The data can be used to create the following table. Note: I chose to generate the diff-indiff table using percentages. It could also be generated with counts data to answer the question. Chance of Receiving a Job Offer in the: Type of Worker Black part of town White part of town Differenc e Diff-inDiff Black 90 ÷ 200 = 0.45 50 ÷ 200 = 0.25 -0.20 White 80 ÷ 200 = 0.40 120 ÷ 200 = 0.60 0.20 0.40 There does appear to be discrimination as whites are 40% more likely to be offered jobs in the white part of town after controlling for differences elsewhere.  It is likely not statistical discrimination as the differential is huge, 40%, and the pattern of discrimination is defined by neighborhood boundaries.  For employee discrimination, we need to see whether white (black) employees accept the offer in black (white) part of the town. Having an offer itself is not enough to decide this. However, the fact that every worker apply for jobs in both location might be interpreted as workers do not mind the color.  Customer discrimination in the white part of the town might be present as majority of workers who get an offer in the white part of the town are whites.  .The same goes for employer discriminate. The discrimination observed in the diff-indiff table might be arising from the owners of