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International Workers’ Day: How to reduce employment discrimination ?

May 1, 2023 por Paloma Acevedo - Wladimir Zanoni Lopez - Editor: Daniel Peciña-Lopez Leave a Comment

Este artículo está también disponible en / This post is also available in: Spanish


More than 20% of Latin Americans and Caribbeans feel they are discriminated against. Unfortunately, this is not just a perception; discrimination is an invisible reality and has a lot to do with purchasing power and place of residence. Last year, on the occasion of International Workers’ Day, we published an article showing how the IDB had found that people living in vulnerable neighborhoods have almost 30% less chance of getting a job than those in a formal neighborhood, despite having similar qualifications. Now that the evidence is in, it is time for action: what can we do to reduce this discrimination and equalize opportunities for the people who are affected by it?

In this article, which is part of a series of blogs on urban discrimination, we report on a new IDB study that uses a new methodology to answer the following questions about discrimination in the workplace: What other variables are affected by discrimination against people living in informal settlements? What explains it? And most importantly, how can we reduce it?

How has the IDB studied discrimination in this new research?

In 2022, the IDB released a first study on urban discrimination using a methodology known as “matching studies,” which is widely used to measure this phenomenon. Following the methodology, we sent applications to almost 4,000 real job offers online. For each job we sent two candidate profiles, which had equivalent personal characteristics, education, and experience. They only differed in their place of residence: one lived in an informal settlement (also called camp, villa, or favela), while the other lived in a formal neighborhood (although of a similar socioeconomic level).

This year we have just published a second study to deepen the analysis. To do so, we recruited 267 human resources agents from the real labor market, who were asked to select fictitious candidates on an online platform. This allowed us to find out more about the phenomenon of discrimination. Each of the recruited agents was asked to participate in a recruitment exercise where they had to select between pairs of candidates for ten different positions. And – you have probably guessed it – each pair of candidates had similar personal and professional characteristics. The only variation was the neighborhood of residence. While one lived in an informal settlement- campamento, favela, villa – the other lived in a formal neighborhood, albeit of equivalent socioeconomic status.

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Download the publication here

In addition to asking the human resources agents to tell us to whom they would offer each of the positions, we asked them to say what salary they would offer each of the candidates. Finally, we asked them to rate each candidate on a scale of 1 to 10. All the above was carried out through an on-line platform. Before starting the exercise, we asked each agent to fill in some modules with personal information and to take several personality tests on the same platform.

As part of the study, we incorporated a “behavioral economics” intervention, so that after doing round 8 of candidate selection, we showed them a message to inform them about the job discrimination faced by people living in informal neighborhoods. Then, they finished their exercise with two more rounds of screening.

What did we find out about discrimination?

  • Persistence of discrimination towards informal neighborhood settlements: formal neighborhood dwellers were selected 5.8 times out of ten, while informal neighborhood dwellers were selected 4.2 times. In addition, human resources agents considered the inhabitants of informal neighborhoods to be less qualified to carry out their work. In fact, they were offered lower salaries (despite having a similar profile!). This result validated the results of the previous study.
  • Discrimination in selecting employees seemed to be motivated by what is called “taste based discrimination” (a type of exclusion based on pure prejudice). However, when determining salary, human resources agents relied more on “statistical discrimination,” which judges a person based on the characteristics of the group to which he or she belongs rather than on his or her own personal characteristics. We found a correlation between some psychological characteristics of human resources agents and the discrimination ratio. Although further analysis would be necessary to evaluate the psychological traits of the agents, the study found a statistical association between empathy and discrimination, with agents who are less able to put themselves in the shoes of others being the ones who discriminated the most.

What can we do to reduce discrimination?

Between rounds 8 and 9 of the exercise we presented HR agents with the following message:

“An Inter-American Development Bank study recently conducted in your city found that, even though they have equal job training and work experience, people in informal neighborhoods are selected for jobs more than 20% less often than people in formal neighborhoods.”

We took advantage of the design of the exercise (namely that the position for which they had to select appeared in a random order) to causally estimate the impact of the intervention on discrimination levels. We found that simply showing them that message was enough to generate a positive impact and reduce discrimination in a statistically significant way.

What lessons can we apply to urban public policy?

In line with the conclusions of the first article in this series (available here), there are three paths to follow if we want to reduce discrimination:

  • Measure: monitor the existence of discrimination in different spheres of society. For example, using one of the methodologies presented here.
  • Act: carry out anti-discrimination interventions to reduce discrimination. An example is to provide information, as presented in this study.
  • Legislate: create laws to prevent, detect and punish discrimination.

What lessons can we apply to urban policy? Development programs that focus on vulnerable areas seek to integrate their inhabitants to offer them equal opportunities.  However, if the rest of the population discriminates against them, they will continue to face an invisible barrier that will limit their development. It is important for public administrations to work so that the inhabitants of formal neighborhoods change their perception of those who live in vulnerable neighborhoods, so that they can benefit from greater integration and all the opportunities offered by the city.

Related content:

Have you ever been discriminated against?
Does living in a vulnerable neighborhood influence the options of finding a job?

Filed Under: Urban society Tagged With: Discrimination, inequality, urban discrimination, Urban Inequality

Paloma Acevedo

Paloma Acevedo es economista, Especialista en Desarrollo Urbano y Vivienda en el Banco Interamericano de Desarrollo. Desde la oficina de Ecuador, y anteriormente Argentina, trabaja con los gobiernos de Latinoamérica en la originación, el diseño, la implementación y la evaluación de proyectos de desarrollo en el área de vivienda y mejoramiento de barrios vulnerables. Anteriormente se desempeñó como especialista en Evaluación en la Oficina de Planeación estratégica del BID donde contribuyó en la generación de conocimiento y evaluabilidad de los proyectos. Tiene un doctorado en Economía con especialización en Evaluación de Políticas Públicas por la Universidad Complutense de Madrid y un Master en economía cuantitativa en el Centro de Estudios Monetarios y Financieros (CEMFI). Antes de trabajar en el BID fue Especialista en Monitoreo y Evaluación en el Banco Mundial trabajando en la oficina del Economista Jefe del Sector de Desarrollo Humano y en el Departamento de Investigación. A lo largo de estos años ha ampliado la agenda de desarrollo urbano y vivienda en América Latina profundizando en aspectos de inclusión y sostenibilidad desde su rol de Jefa de Proyecto. También ha combinado este rol con la realización de evaluaciones de impacto para informar a las políticas públicas de gobiernos, algunas de las cuales han sido publicadas en prestigiosas revistas

Wladimir Zanoni Lopez

Wladimir Zanoni is a Senior Country Economist for Ecuador at IDB. Before joining the Bank in 2018, Zanoni worked at Chapin Hall Center for Children at the University of Chicago on the design, evaluation, and implementation of public policies in the USA in the education, early childhood, health, and social protection sectors. Zanoni has been a Fellow at the Harris School of Public Policy at the University of Chicago (where he obtained an MPP and a PhD in public policy) and has taught in the Economics and Public Policy departments in Carleton and McGill Universities in Canada

Editor: Daniel Peciña-Lopez

Daniel Peciña-Lopez is a specialist in international affairs, external relations and communication. He has more than 10 years of professional experience in diplomatic delegations, and international organizations in cities such as Washington DC, New York, Chicago, Madrid, Mexico City and Hong Kong, among others. Daniel is Master of International Affairs from Columbia University, Master of Science from the University of Oxford Brookes and Licenciado from Universidad Complutense de Madrid. In 2010 Daniel received the First National Award for Excellence in Academic Performance, from the Ministry of Education (Government of Spain) for being the university level student with the highest average GPA score in the country.

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Este es el blog de la División de Vivienda y Desarrollo Urbano (HUD) del Banco Interamericano de Desarrollo. Súmate a la conversación sobre cómo mejorar la sostenibilidad y calidad de vida en ciudades de América Latina y el Caribe.

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