•  
  •  
 

Seeing Through Color Blindness: Social Networks as a Mechanism for Discrimination

Start Page

519

Abstract

I study labor markets in which firms both hire via referrals and are race blind or
color- blind. I develop an employment model showing that despite initial equality in ability, employment, wages, and network structure, minorities receive
disproportionately fewer jobs through referrals and lower expected wages, sim-
ply because their social group is smaller. This discriminatory outcome, which I
term “social network discrimination,” arises from homophily and falls outside
the dominant economics discrimination models, which are taste based and
statistical. I calibrate the model using a nationally representative sample of youth
networks to estimate the lower bound welfare gap caused by social network
discrimination, which also disadvantages black workers. This paper isolates a
potential underlying mechanism for inequality, adding to the understanding of
labor- market disparities that have been widely studied across the social sciences.
In doing so, the paper disproves the proposition that color-blind policies inherently promote individual merit.

Link to Full Text

Share

COinS