Customer Discrimination and Employment Outcomes for Minority Workers

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Customer Discrimination and Employment Outcomes
for Minority Workers
By Harry J. Holzer and Keith R. Ihlanfeldt

• Jeff Feuerhelm, Ryan Norlin, Tyson Williams

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Goal

• Effects of customer discrimination on the
  employment and earnings of minorities
• Focus on employment

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Four Metros
Detroit
Boston
LA
Atlanta
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Data

• 1992 1994
• 800 random employers per metro
• Race of last employee hired

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Observations

• Individuals
• Last hire
• Groups
• Races of employees
• Races
• White
• Black
• Hispanic

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Hypothesis

• Customers have racial tastes
• Profit maximizing firms respond
• Desire customer satisfaction
• Stronger customer taste stronger firm response
• Customer contact is significant

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Conclusion

• Direct correlation
• Customer race
• Employees race
• Direct correlation
• Customer race and contact
• Employees race
• Customer contact, by itself, has no effect

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Flaws?

• Larger data set
• Too many divisions late in paper

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Questions??