Racial Discrimination in the Labor Market: Theories and Empirics

This paper reviews theories of race discrimination in the labor market. Taste-based models can generate wage
and unemployment duration differentials when combined with either random or directed search even
when strong prejudice is not widespread, but no existing model explains the unemployment rate differential.
Models of statistical discrimination based on differential observability of productivity across races
can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment.
At their current state of development, models of statistical discrimination based on rational stereotypes
have little empirical content.

Experimental Research on Labor Market Discrimination

This paper surveys the full range of experimental literature on labor market discrimination, places it in the context of the broader research literature on labor market discrimination, discusses the experimental literature from many different perspectives (empirical, theoretical, policy, and legal), and reviews what this literature has taught us thus far, and what remains to be done.