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Can competition in the hiring market undermine ethnic discrimination during the hiring process?

Last registered on February 22, 2022

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Pre-Trial

Trial Information

General Information

Title

Can competition in the hiring market undermine ethnic discrimination during the hiring process?

RCT ID

AEARCTR-0008455

Initial registration date

October 27, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

October 29, 2021, 1:41 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

February 22, 2022, 9:12 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

Region

Primary Investigator

Name

Affiliation

Queensland University of Technology

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2022-03-01

End date

2024-02-01

Keywords

Behavior, Lab, Labor

Additional Keywords

JEL code(s)

Secondary IDs

Prior work

This trial is based on or builds upon one or more prior RCTs.

Abstract

In this experiment, we will experimentally examine the impact of increased competition in the recruitment market on employers' hiring and wage decisions. We design a laboratory experiment where we will use reserve wage to stimulate the hoteling model (Hotelling, 1929) to introduce competition in the hiring market. We will compare 2X2 treatments to identify whether increased competition in hiring market can effectively undermine the ethnic discrimination in both hiring and wage decisions: Hiring competition X flexible wage scheme. In the treatments with hiring competition settings, employers will face hiring competition in the labour market while in the treatments with a flexible wage scheme, employers can choose different wages to increase the likelihood of hiring their preferred candidates. The experiment is designed to test two theories: (1) whether discrimination can help employers to segment the market and escape away from competition; (2) whether ban of wage discrimination will lead to greater hiring discrimination.

External Link(s)

Registration Citation

Citation

Hu, Hairong. 2022. "Can competition in the hiring market undermine ethnic discrimination during the hiring process?." AEA RCT Registry. February 22. https://doi.org/10.1257/rct.8455-2.2

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2022-03-01

Intervention End Date

2024-02-01

Primary Outcomes

Primary Outcomes (end points)

The main variable of interest is the probability of an individual being hired in different treatments, controlled by ethnicity, scores and age. Another main variable is the wage that an individual being offered in different treatments, controlled by ethnicity, scores and age

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary outcome variables are the percentage (%) of minority candidates being hired in different treatments and the differences in mean wage between majority candidates and minority candidates in different treatments.

Secondary Outcomes (explanation)

Experimental Design

Experimental Design

We design a two-stage hiring game where the two participants (i.e. employers) will see four candidates, and they must decide whether to hire them or not in the first stage (The profile of a candidate includes age, scores of a real effort task and their ethnicity information). If they decide to hire the candidate, they then need to choose a wage for their hired candidate in stage 2. We will introduce an intermediate hiring competition or a flexible wage scheme in the different treatments. To allow for learning effects, the participants will play this two-stage game in 5 independent rounds. The experiment is based on a between-subject design. We will introduce a reservation wage, R0, for each candidate. In the competitive environment (e.g. Treatment A0), one employer needs to choose a wage higher than R0 to successfully hire the preferred candidate and the other employer need to choose a wage higher than 25-R0 to successfully hire the preferred candidate. R0 ranges from [5, ∞]. Therefore, in the baseline treatments, there is an implicit minimum wage of 5 points.

In the baseline treatment (Treatment A0), 2 employers will have a hiring competition if both employers decide to hire the same candidate, and they are free to choose different wage offer to different candidates. As the main experimental variation (Treatment B0), we consider a non-competitive treatment where employers are free to choose different wage offers and always hire the preferred candidate without competition.

In the main treatments, 2 employers are unable to practice wage discrimination, and they can only choose identical wages for all the preferred candidates under competitive (Treatment A1) and non-competitive scenarios (Treatment B1).

The experiment is designed to examine the economic theory which predicts that discrimination can be profitable for employers to segment market and reduce wage payments in the presence of hiring competition (as in Treatment A0), and it is not profitable in the absence of hiring competition (as in Treatment B0). Moreover, the hiring discrimination against minority workers should be greater if wage discrimination is feasible (as in Treatment A0) than if wage discrimination is banned (as in Treatment A1). And such differences should only exist in the competitive environment (A0-A1) and do not exist in the non-competitive environment (B0-B1).

Experimental Design Details

Randomization Method

randomised by a computer

Randomization Unit

individual employee candidate

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

Each treatment has 100 sessions. So there will be 400 sessions

Sample size: planned number of observations

Each session has 4 employee candidates and 2 participants. The total observations are 4x2x4x100 = 3200 observations

Sample size (or number of clusters) by treatment arms

400 sessions

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

Institutional Review Boards (IRBs)

IRB Name

IRB Approval Date

IRB Approval Number

Analysis Plan Documents

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?

No

Data Collection Complete

Data Publication

Data Publication

Is public data available?

No

Program Files

Program Files

Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials