Doctoral Dissertation Research in Economics: Paternalistic Discrimination

Project Outcomes Statement

Women in South Asia struggle to access the labor market, particularly in male-dominated occupations. In Dhaka, Bangladesh, women lag behind men in terms of employment and earnings, despite great strides in education and training. Then what is keeping women out of the labor market?

Gender discrimination — the differential treatment of men and women on the labor market — may be an important piece of the answer. Previous research has shown that employers discriminate for several reasons. In some cases, employers discriminate to protect their profits — for example, some employers think women are less productive than men with the same credentials. In other cases, employers may simply prefer working with men rather than women. Our research identifies a novel source of labor market discrimination, which we call paternalistic discrimination: the preferential hiring of men to protect women from dangerous or unpleasant tasks. That is, employers may prefer to hire a man over an equally qualified woman for jobs that involve risk to the woman’s physical or mental safety, reputation, or marriageability.

To identify paternalistic discrimination and its effect on hiring, we conducted two field experiments in Dhaka, Bangladesh. Our field experiments included real job applicants and employers in Dhaka as participants. We examine application and hiring decisions for a job specially created by the research team: a one-time Excel workshop and office job on the night shift (7 p.m. to midnight) that provides free safe transport home to all workers (see Figure 1). In the first experiment, we examine how demand for female labor responds to employers’ perceptions of safety; in the second experiment, we examine how labor supply responds to applicants’ perceptions of safety.
Experiment 1: Employer Experiment

We recruited 495 employers, individuals with recent hiring experience in Dhaka, to act as hiring consultants, choosing applicants to hire for the job. We also advertise the job on university campuses, recruiting 990 job applicants.

The key variation in the experiment changes employers’ perceptions of worker safety, by randomizing employers into either the Transport treatment, where employers are informed about the free safe transport home, or the No Transport treatment, where employers are not informed about the transport.

In addition, we also vary whether we offer a wage subsidy, paid either to employers or their male or female workers. The amount of the subsidy would allow workers to purchase a safe ride home for themselves. As a result, employers who trust applicants to judge danger for themselves should hire more women with the Female Worker subsidy than with the ride. Only employers who wish to control women’s behaviour should more hire women in the Transport treatment than in the Female Worker subsidy treatment.
Experiment 2: Applicant Experiment

We complement the hiring experiment with an application experiment. We recruit 770 new applicants, distinct from those in the hiring experiment, interested in the nightshift workshop and job on the nightshift. To vary applicants’ perception of the risks associated with the job, we randomize whether applicants are told that free and safe transport will be provided at the end of the shift.
Results
Increasing the perception of safety increases both the number of women who apply and the number of women hired.

Employers discriminate paternalistically: providing a safe ride for applicants increases female hiring by 21%. Information about the safe ride makes women more attractive applicants for the job, suggesting that employers do care about the well-being of the applicants. Moreover, employers prefer for women to receive a ride home than to receive a bonus payment of greater value (see Figure 2).

Applicants value the ride, but less than employers do. Applicants who are informed about the ride are willing to work for about BDT 200 less than applicants who don’t know about the ride (see Figure 3). At a wage of BDT 1,500, this leads to a drop in female applications of 15%.

Paternalistic discrimination suggests a set of policy tools to increase female labor force participation. For one, increasing the security of workers (both in the workplace and during the commute) may increase the number of women in the workplace. Programs of this sort have the potential to benefit both employers and workers, resulting in higher female employment rates and overall firm productivity. At a minimum, policymakers should be aware that policies targeting worker supply through workplace conditions and job amenities may also affect employment through unintended demand-side channels. Ignoring paternalistic discrimination likely understates the benefits of some policies, leading to mistaken priorities.