Does the equal pay policy affect ethnic hiring discrimination?

Last registered on January 28, 2023

Pre-Trial

Trial Information

General Information

Title
Does the equal pay policy affect ethnic hiring discrimination?
RCT ID
AEARCTR-0009009
Initial registration date
March 23, 2022

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
March 24, 2022, 4:56 PM EDT

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

Last updated
January 28, 2023, 10:42 PM EST

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

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Primary Investigator

Affiliation
Queensland University of Technology

Other Primary Investigator(s)

PI Affiliation
Queensland University of Technology

Additional Trial Information

Status
In development
Start date
2023-02-01
End date
2024-02-29
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
In this experiment, we will investigate the impact of an equal pay policy on hiring discrimination at different levels of competition in the labour market. We design a laboratory experiment where we will use reservation wage to stimulate the hoteling model (Hotelling, 1929) to introduce competition in the hiring market. We consider different scenarios for the hiring market: (i) No equal pay policy + no employer competition; (ii) Equal pay policy + no employer competition; iii) No equal pay policy + employer competition; iv) Equal pay policy + employer competition. The experiment is designed to test three questions: (1) Whether and how an equal pay policy affects employers’ decisions toward ethnic majority and minority candidates differently; (2) Whether employer competition affects employers' decisions with and without an equal pay policy.
External Link(s)

Registration Citation

Citation
Hu, Hairong and Gregory Kubitz. 2023. "Does the equal pay policy affect ethnic hiring discrimination?." AEA RCT Registry. January 28. https://doi.org/10.1257/rct.9009-2.1
Experimental Details

Interventions

Intervention(s)
1) NC-Flexible (1): Employers can successfully hire a candidate as long as their wage offer is greater than the reservation wage. Employers can offer different wages to different candidates.
2) NC-Fixed (2): Employers can successfully hire a candidate as long as their wage offer is greater than the reservation wage. Employers can only offer an identical wage to all candidates they want to hire.
3) C-Flexible (3): Employers can successfully hire a candidate if 1) their wage offer is greater than the reservation wage, and 2) their wage offer is greater than their competitor. Employers can offer different wages to different candidates.
4) C-Fixed (4): Employers can successfully hire a candidate if 1) their wage offer is greater than the reservation wage, and 2) their wage offer is greater than their competitor. Employers can only offer an identical wage to all candidates they want to hire.
Intervention Start Date
2023-03-31
Intervention End Date
2024-02-29

Primary Outcomes

Primary Outcomes (end points)
Overall Effect: The main outcomes of interest are how an equal pay policy impacts 1) the percentage of candidates hired, and 2) the average wage of hired candidates between two ethnic types.
Primary Outcomes (explanation)
We will compare the percentage of candidates hired that are minorities in Treatment 1 (NC-Fixed) and Treatment 2 (NC-Flexible) to identify the impact of an equal pay policy in the non-competitive labour market. Similarly, we will also compare the percentage of candidates hired that are minorities in Treatment 2 (C-Fixed) and Treatment 4 (C-Flexible) to identify the impact of an equal pay policy in the competitive labour market. We will also compare the average wage of hired candidates between majority and minority groups to identify the role of wage cost plays in the impact of an equal pay policy.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This experiment consists of two phases: 1) the preliminary phase, in which we aim to recruit 150 participants to complete a series of anagram tasks; and 2) the main phase, in which we aim to recruit 100 participants for each of the four treatments to complete a hiring task (i.e., 400 participants in total).

In the preliminary phase, participants will be asked to complete five 2-minute anagram tasks individually and paid by piece-rate performance. This phase is designed to generate actual profiles of candidates to be used in the main phase of the experiment. The benefit of using actual profiles is to introduce real consequences for discriminatory behaviour and therefore capture the actual level of employer discrimination (Hedegaard & Tyran, 2018). To construct a balanced candidates pool for the second phase, 75 participants will be recruited from an ethnic minority group (i.e., East Asians) and the remaining 75 will be recruited from the ethnic majority group (i.e., Whites). Out of the five performances, we drop the lowest and the highest scores to form the final candidate profiles. And we randomly choose 2 scores from the rest of 3 scores remaining as the pre-performance score and interview performance score

In the main phase of the experiment, participants will be asked to finish a manager task to make some hiring decisions, given a set of 4 pre-screened candidate profiles drawn from the data collected in the preliminary phase. Each participant in this phase will be assigned to one of the following four experimental treatments: an NC-Flexible treatment with neither the equal pay policy nor the hiring competition (Treatment 1), an NC-fixed treatment without the hiring competition, but with the equal pay policy that forces employers to offer the same wage to all desired candidates (Treatment 2), a C-Flexible treatment without the equal pay policy but with hiring competition in which each employer needs to compete with another employer in terms of wages for each desired candidates (Treatment 3), and a C-Fixed treatment with both equal pay policy and hiring competition. Note that we will only recruit participants from the ethnic majority group as employers/managers". Each set of the four candidates' profiles include 2 minority candidates and 2 majority candidates, which are randomly selected from the pool collected in the preliminary phase.

The employer/manager is given the interview performances of all four candidates and is asked whether they want to hire or not hire for each candidate; and if they hire, what is the wage they are willing to offer. Each candidate will have an unknown reservation wage. Employer/manager can successfully hire the candidate if their wage offer is higher than candidate's reservation wage (Treatment 1 and 2), or if their wage offer is higher than both candidate's reservation wage and the other manager (competitor)'s wage offer to the same candidate (Treatment 3 and 4). The potential employer/manage will be able to select an identical wage offer (Treatment 2 and 4) or different wage offers to different candidates. On top of interview performances, the potential employer/manager will also be given candidates’ age, prolific id (not exactly the same as the real ID), and the ethnicity information (reflected through the surnames).
Experimental Design Details
Not available
Randomization Method
A computer
Randomization Unit
individual candidate
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Each treatment has 100 sessions. So there will be 600 sessions
Sample size: planned number of observations
Each session has 4 employee candidates and 2 participants. The total observations are 4x2x6x100= 4800 observations
Sample size (or number of clusters) by treatment arms
600 sessions
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number