How Workplace Disparities May Arise: An Economic Outline
Law360, February 15, 2019
Among the most salient recent developments in employment law have been the passing of stronger pay equity laws in a number of states and a significant uptick in the number of workplace discrimination filings. To comply with the former and guard against the latter, it is important for companies to understand how disparities in workplace outcomes can occur.
In a new Law360 article, “How Workplace Disparities May Arise: An Economic Outline,” Managing Principal Jee-Yeon Lehmann, Vice President Ishita Rajani, and Manager Cameron Fowler provide a summary of how economists think about the potential sources and channels through which workplace disparities can appear, sometimes in the presence of ostensibly neutral hiring practices. The authors begin by reviewing the two principal economic models of employer discrimination – prejudice-based models and statistical discrimination models. They then draw some insights from these theoretical models about how workplace disparities might arise and be mitigated. Throughout the article, the authors emphasize the importance and challenges of empirical analysis in determining whether or not discrimination occurred in any given setting in the real world.