Understanding whether labor market discrimination explains inferior labor market outcomes for many groups has drawn the attention of labor economists for decades— at least since the publication of Gary Becker’s The Economics of Discrimination in 1957. The decades of research on discrimination in labor markets began with a regression-based “decomposition” approach, asking whether raw wage or earnings differences between groups—which might constitute prima facie evidence of discrimination—were in fact attributable to other productivity-related factors. Subsequent research—responding in large part to limitations of the regression-based approach—moved on to other approaches, such as using firm-level data to estimate both marginal productivity and wage differentials. In recent years, however, there has been substantial growth in experimental research on labor market discrimination—although the earliest experiments were done decades ago. Some experimental research on labor market discrimination takes place in the lab. But far more of it is done in the field, which makes this particular area of experimental research unique relative to the explosion of experimental economic research more generally. 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, and policy), and reviews both what this literature has taught us thus far, and what remains to be done.

The need for school-to-work programs or other means of increasing early job market stability is predicated on the view that the “chaotic” nature of youth labor markets in the United States is costly because workers drift from one job to another without developing skills, behavior, or other characteristics that in turn lead to higher adult earnings. However, there is also ample evidence that workers receive positive returns to job shopping. This paper asks whether youths in unstable jobs early in their careers suffer adverse labor market consequences as adults. Its specific contribution is to account for the endogenous determination of early job stability and adult wages as outcomes of a job search/job shopping process. Labor market conditions in the early years in the labor market are used as instrumental variables for the job stability experienced during those years. The instrumental variables estimates generally point to substantial positive effects of early job stability on adult wages, in contrast to OLS estimates, which indicate little or no relationship.

This article tests the implications of the general human capital that (i) at the individual level, there is a negative relationship between the initial wage level and wage growth of inexperienced workers and (ii) at the market level, the ratio of the present values of wage profiles of investors and otherwise identical noninvestors equals one. We find a negative relationship between initial wage levels and wage growth, even after correcting for negative biases in existing estimates of this relationship. We also find that the ratio of the present values of rising wage profiles to flat wage profiles is generally close to one.

After-hours pricing in foreign equity markets of multiple-listed U.S. securities appeared to be efficient in predicting New York prices in the weeks immediately following the October 1987 crash, but relatively uninformative in succeeding months. By contrast, daily changes in New York prices appear to be efficiently incorporated in after-hours trading on both the Tokyo and London exchanges throughout the sample period. This paper suggests that the asymmetry and temporal variations in cross-market correlations are consistent with rational investor behavior in equity markets with nonzero transaction costs and time-varying share price volatility.

We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and we assess the role of education- and language-related skill differentials in generating workplace segregation by race and (Hispanic) ethnicity. Our results indicate that there is considerable segregation by race, ethnicity, education, and language in the workplace. Only a tiny portion of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace can be attributed to differences in English-language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language.

We examine the evidence on whether real wages decline with age among older men. While the general human capital model of wage growth over the life cycle predicts that wages will fall as workers approach the end of their career, alternative models of wage growth do not predict these wage declines. We find that in longitudinal estimates of age-wage profiles wage declines only set in for workers in their 60s. Furthermore, these longitudinal declines are at least partly due to interactions with the Social Security system. The earnings cap or other effects of Social Security appear to lead some workers to choose jobs and job characteristics associated with lower wages.

Theory predicts that minimum wages will reduce employer‐provided on‐the‐job training designed to improve workers' skills on the current job, but it is ambiguous regarding training that workers obtain to qualify for a job. We estimate the effects of minimum wages on both types of training received by young workers, exploiting cross‐state variation in minimum wage increases. Much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job. But there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs.

We use microlevel data on employers and employees from a sample of establishments in four major metropolitan areas in the United States to investigate whether Affirmative Action leads to the hiring of minority or female employees who are less qualified. Our measures of qualifications include the educational attainment of the workers hired and a variety of outcome measures related to worker performance on the job. We find evidence of lower educational qualifications among women and minorities hired under Affirmative Action. However, we do not find evidence of weaker job performance among most groups of minority and female Affirmative Action hires.