Subtle Discrimination

Subtle Discrimination

Daniel Ferreira, Elena S. Pikulina

Series number :

Serial Number: 
903/2023

Date posted :

March 13 2023

Last revised :

September 24 2023
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Keywords

  • bias • 
  • Gender gap • 
  • human capital • 
  • firm-specific skill • 
  • Promotion • 
  • performance evaluation • 
  • glass ceiling • 
  • leaking pipe • 
  • Gender Bias • 
  • Wage gap • 
  • wage differential

We introduce the concept of subtle discrimination—biased acts that cannot be objectively ascertained as discriminatory—and study its implications in a model of competitive promotions. When choosing among similarly qualified candidates, a principal with a subtle bias towards a particular group may plausibly deny being biased.

We show that subtle (as opposed to overt) discrimination has unique implications. Discriminated candidates perform better in low-stakes careers, while favored candidates perform better in high-stakes careers. In equilibrium, firms are polarized: high-productivity firms become “progressive” and have diverse management teams, while low-productivity firms choose to be “conservative” and homogeneous at the top.

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Authors

Real name:
Elena S. Pikulina