The Sociology of Discrimination: Racial Discrimination in Employment, Housing, Credit, and Consumer Markets

ANRV348-SO34-09 ARI 4 June 2008 7:52

The Sociology

of Discrimination:

Racial Discrimination

in Employment, Housing,

Credit, and Consumer

Markets

Devah Pager and Hana Shepherd

Department of Sociology, Princeton University, Princeton, New Jersey 08544;

email: [email protected], [email protected]

Annu. Rev. Sociol 2008. 34:181–209

First published online as a Review in Advance on

March 17, 2008

The Annual Review of Sociology is online at

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Key Words

race, inequality, measurement, mechanisms, African Americans, racial

minorities

Abstract

Persistent racial inequality in employment, housing, and a wide range

of other social domains has renewed interest in the possible role of

discrimination. And yet, unlike in the pre–civil rights era, when racial

prejudice and discrimination were overt and widespread, today discrim-

ination is less readily identiﬁable, posing problems for social scientiﬁc

conceptualization and measurement. This article reviews the relevant

literature on discrimination, with an emphasis on racial discrimination

in employment, housing, credit markets, and consumer interactions.

We begin by deﬁning discrimination and discussing relevant methods

of measurement. We then provide an overview of major ﬁndings from

studies of discrimination in each of the four domains; and, ﬁnally, we

turn to a discussion of the individual, organizational, and structural

mechanisms that may underlie contemporary forms of discrimination.

This discussion seeks to orient readers to some of the key debates in the

study of discrimination and to provide a roadmap for those interested

in building upon this long and important line of research.

181

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Persistent racial inequality in employment,

housing, and other social domains has renewed

interest in the possible role of discrimination.

Contemporary forms of discrimination, how-

ever, are often subtle and covert, posing prob-

lems for social scientiﬁc conceptualization and

measurement. This article reviews the relevant

literature on racial discrimination, providing a

roadmap for scholars who wish to build on this

rich and important tradition. The charge for

this article was a focus on racial discrimination

in employment, housing, credit markets, and

consumer interactions, but many of the argu-

ments reviewed here may also extend to other

domains (e.g., education, health care, the crimi-

nal justice system) and to other types of discrim-

ination (e.g., gender, age, sexual orientation).

We begin this discussion by deﬁning discrim-

ination and discussing methods for measuring

discrimination. We then provide an overview of

major ﬁndings from studies of discrimination in

employment, housing, and credit and consumer

markets. Finally, we turn to a discussion of the

individual, organizational, and structural mech-

anisms that may underlie contemporary forms

of discrimination.

WHAT IS DISCRIMINATION?

According to its most simple deﬁnition, racial

discrimination refers to unequal treatment of

persons or groups on the basis of their race

or ethnicity. In deﬁning racial discrimination,

many scholars and legal advocates distinguish

between differential treatment and disparate

impact, creating a two-part deﬁnition: Dif-

ferential treatment occurs when individuals

are treated unequally because of their race.

Disparate impact occurs when individuals are

treated equally according to a given set of

rules and procedures but when the latter are

constructed in ways that favor members of

one group over another (Reskin 1998, p. 32;

National Research Council 2004, pp. 39–

40). The second component of this deﬁnition

broadens its scope to include decisions and pro-

cesses that may not themselves have any explicit

racial content but that have the consequence

of producing or reinforcing racial disadvantage.

Beyond more conventional forms of individual

discrimination, institutional processes such as

these are important to consider in assessing how

valued opportunities are structured by race.

A key feature of any deﬁnition of discrim-

ination is its focus on behavior. Discrimina-

tion is distinct from racial prejudice (attitudes),

racial stereotypes (beliefs), and racism (ideolo-

gies) that may also be associated with racial dis-

advantage (see Quillian 2006). Discrimination

may be motivated by prejudice, stereotypes, or

racism, but the deﬁnition of discrimination does

not presume any unique underlying cause.

HOW CAN WE MEASURE

DISCRIMINATION?

More than a century of social science interest

in the question of discrimination has resulted in

numerous techniques to isolate and identify its

presence and to document its effects (National

Research Council 2004). Although no method

is without its limitations, together these tech-

niques provide a range of perspectives that can

help to inform our understanding of whether,

how, and to what degree discrimination matters

in the lives of contemporary American racial

minorities.

Perceptions of Discrimination

Numerous surveys have asked African

Americans and other racial minorities about

their experiences with discrimination in the

workplace, in their search for housing, and in

other everyday social settings (Schuman et al.

2001). One startling conclusion from this

line of research is the frequency with which

discrimination is reported. A 2001 survey,

for example, found that more than one-third

of blacks and nearly 20% of Hispanics and

Asians reported that they had personally been

passed over for a job or promotion because

of their race or ethnicity (Schiller 2004). A

1997 Gallup poll found that nearly half of all

black respondents reported having experienced

discrimination at least once in one of ﬁve

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common situations in the past month (Gallup

Organ. 1997). Further, the frequency with

which discrimination is reported does not

decline among those higher in the social hier-

archy; in fact, middle-class blacks are as likely

to perceive discrimination as are working-class

blacks, if not more (Feagin & Sikes 1994,

Kessler et al. 1990). Patterns of perceived

discrimination are important ﬁndings in their

own right, as research shows that those who

perceive high levels of discrimination are more

likely to experience depression, anxiety, and

other negative health outcomes (Kessler et al.

1990). Furthermore, perceived discrimination

may lead to diminished effort or performance

in education or the labor market, which itself

gives rise to negative outcomes (Ogbu 1991;

Steele 1997; Loury 2002, pp. 26–33). What

remains unclear from this line of research,

however, is to what extent perceptions of

discrimination correspond to some reliable

depiction of reality. Because events may be

misperceived or overlooked, perceptions of

discrimination may over- or underestimate the

actual incidence of discrimination.

Reports by Potential Discriminators

Another line of social science research focuses

on the attitudes and actions of dominant groups

for insights into when and how racial consider-

ations come into play. In addition to the long

tradition of survey research on racial attitudes

and stereotypes among the general population

(cf. Schuman et al. 2001, Farley et al. 1994),

a number of researchers have developed inter-

view techniques aimed at gauging propensities

toward discrimination among employers and

other gatekeepers. Harry Holzer has conducted

a number of employer surveys in which employ-

ers are asked a series of questions about “the

last worker hired for a noncollege job,” thereby

grounding employers’ responses in a concrete

recent experience (e.g., Holzer 1996). In this

format, race is asked about as only one inci-

dental characteristic in a larger series of ques-

tions concerning this recent employee, thereby

reducing the social desirability bias often trig-

gered when the subject of race is highlighted.

Likewise, by focusing on a completed action,

the researcher is able to document revealed

preferences rather than expressed ones and to

examine the range of employer, job, and labor

market characteristics that may be associated

with hiring decisions.

A second prominent approach to investigat-

ing racial discrimination in employment has re-

lied on in-depth, in-person interviews, which

can be effective in eliciting candid discussions

about sensitive hiring issues. Kirschenman &

Neckerman (1991), for example, describe em-

ployers’ blatant admission of their avoidance

of young, inner-city black men in their search

for workers. Attributing characteristics such as

“lazy” and “unreliable” to this group, the em-

ployers included in their study were candid in

their expressions of strong racial preferences

in considering low wage workers (p. 213; see

also Wilson 1996, Moss & Tilly 2001). These

in-depth studies have been invaluable in pro-

viding detailed accounts of what goes through

the minds of employers—at least consciously—

as they evaluate members of different groups.

However, we must keep in mind that racial

attitudes are not always predictive of corre-

sponding behavior (LaPiere 1934, Allport 1954,

Pager & Quillian 2005). Indeed, Moss & Tilly

(2001) report the puzzling ﬁnding that “busi-

nesses where a plurality of managers com-

plained about black motivation are more likely

to hire black men” (p. 151). Hiring decisions

(as with decisions to rent a home or approve a

mortgage) are inﬂuenced by a complex range of

factors, racial attitudes being only one. Where

understanding persistent racial prejudice and

stereotypes is surely an important goal in and of

itself, this approach will not necessarily reveal

the extent of discrimination in action.

Statistical Analyses

Perhaps the most common approach to study-

ing discrimination is by investigating inequal-

ity in outcomes between groups. Rather than

focusing on the attitudes or perceptions of

actors that may be correlated with acts of

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discrimination, this approach looks to the pos-

sible consequences of discrimination in the

unequal distribution of employment, housing,

or other social and economic resources. Us-

ing large-scale datasets, researchers can iden-

tify systematic disparities between groups and

chart their direction over time. Important pat-

terns can also be detected through detailed

and systematic case studies of individual ﬁrms,

which often provide a richer array of indicators

with which to assess patterns of discrimination

(e.g., Castilla 2008, Petersen & Saporta 2004,

Fernandez & Friedrich 2007).

Discrimination in statistical models is of-

ten measured as the residual race gap in any

outcome that remains after controlling for all

other race-related inﬂuences. Differences may

be identiﬁed through the main effect of race,

suggesting a direct effect of race on an outcome

of interest, or through an interaction between

race and one or more human capital character-

istics, suggesting differential returns to human

capital investments on the basis of race (Oaxaca

1973; National Research Council 2004, chap-

ter 7). The main liability of this approach is that

it is difﬁcult to effectively account for the mul-

titude of factors relevant to unequal outcomes,

leaving open the possibility that the disparities

we attribute to discrimination may in fact be ex-

plained by some other unmeasured cause(s). In

statistical analyses of labor market outcomes,

for example, even after controlling for stan-

dard human capital variables (e.g., education,

work experience), a whole host of employment-

related characteristics typically remain unac-

counted for. Characteristics such as reliability,

motivation, interpersonal skills, and punctual-

ity, for example, are each important to ﬁnding

and keeping a job, but these are characteris-

tics that are often difﬁcult to capture with sur-

vey data (see, for example, Farkas & Vicknair

1996, Farkas 2003). Complicating matters fur-

ther, some potential control variables may

themselves be endogenous to the process un-

der investigation. Models estimating credit dis-

crimination, for example, typically include con-

trols for asset accumulation and credit history,

which may themselves be in part the byprod-

uct of discrimination (Yinger 1998, pp. 26–27).

Likewise, controls for work experience or ﬁrm

tenure may be endogenous to the process of em-

ployment discrimination if minorities are ex-

cluded from those opportunities necessary to

building stable work histories (see Tomaskovic-

Devey et al. 2005). While statistical models rep-

resent an extremely important approach to the

study of race differentials, researchers should

use caution in making causal interpretations of

the indirect measures of discrimination derived

from residual estimates. For a more detailed

discussion of the challenges and possibilities of

statistical approaches to measuring discrimina-

tion, see the National Research Council (2004,

chapter 7).

Experimental Approaches

to Measuring Discrimination

Experimental approaches to measuring dis-

crimination excel in exactly those areas in which

statistical analyses ﬂounder. Experiments allow

researchers to measure causal effects more di-

rectly by presenting carefully constructed and

controlled comparisons. In a laboratory ex-

periment by Dovidio & Gaertner (2000), for

example, subjects (undergraduate psychology

students) took part in a simulated hiring ex-

periment in which they were asked to evaluate

the application materials for black and white job

applicants of varying qualiﬁcation levels. When

applicants were either highly qualiﬁed or poorly

qualiﬁed for the position, there was no evidence

of discrimination. When applicants had accept-

able but ambiguous qualiﬁcations, however,

participants were nearly 70% more likely to

recommend the white applicant than the black

applicant (see also Biernat & Kobrynowicz’s

1997 discussion of shifting standards).

Although laboratory experiments offer

some of the strongest evidence of causal

Dovidio & Gaertner (2000) also examined changes over

time, comparing parallel data collected at two time points,

1989 and 1999. Although the level of self-reported prejudice

declined signiﬁcantly over the decade, the extent of discrim-

ination did not change.

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relationships, we do not know the extent to

which their ﬁndings relate to the kinds of deci-

sions made in their social contexts—to hire, to

rent, to move, for example—that are most rele-

vant to understanding the forms of discrimina-

tion that produce meaningful social disparities.

Seeking to bring more realism to the investi-

gation, some researchers have moved experi-

ments out of the laboratory and into the ﬁeld.

Field experiments offer a direct measure of dis-

crimination in real-world contexts. In these ex-

periments, typically referred to as audit studies,

researchers carefully select, match, and train in-

dividuals (called testers) to play the part of a

job/apartment-seeker or consumer. By present-

ing equally qualiﬁed individuals who differ only

by race or ethnicity, researchers can assess the

degree to which racial considerations affect ac-

cess to opportunities. Audit studies have doc-

umented strong evidence of discrimination in

the context of employment (for a review, see

Pager 2007a), housing searches (Yinger 1995),

car sales (Ayres & Siegelman 1995), applica-

tions for insurance (Wissoker et al. 1998), home

mortgages (Turner & Skidmore 1999), the pro-

vision of medical care (Schulman et al. 1999),

and even in hailing taxis (Ridley et al. 1989).

Although experimental methods are appeal-

ing in their ability to isolate causal effects, they

nevertheless suffer from some important limita-

tions. Critiques of the audit methodology have

focused on questions of internal validity (e.g.,

experimenter effects, the problems of effective

tester matching), generalizability (e.g., the use

of overqualiﬁed testers, the limited sampling

frame for the selection of ﬁrms to be audited),

and the ethics of audit research (see Heckman

1998, Pager 2007a for a more extensive discus-

sion of these issues). In addition, audit studies

are often costly and difﬁcult to implement and

can only be used for selective decision points

(e.g., hiring decisions but not training, promo-

tion, termination, etc.).

Studies of Law and Legal Records

Since the civil rights era, legal deﬁnitions and

accounts of discrimination have been central

to both popular and scholarly understandings

of discrimination. Accordingly, an additional

window into the dynamics of discrimination

involves the use of legal records from formal

discrimination claims. Whether derived from

claims to the Equal Employment Opportunity

Commission (EEOC), the courts, or state-level

Fair Employment/Fair Housing Bureaus, ofﬁ-

cial records documenting claims of discrimina-

tion can provide unique insight into the pat-

terns of discrimination and antidiscrimination

enforcement in particular contexts and over

time.

Roscigno (2007), for example, analyzed

thousands of “serious claims” ﬁled with the

Civil Rights Commission of Ohio related to

both employment and housing discrimination.

These claims document a range of discrimina-

tory behaviors, from harassment, to exclusion,

to more subtle forms of racial bias. [See also

Harris et al. (2005) for a similar research de-

sign focusing on federal court claims of con-

sumer discrimination.] Although studies rely-

ing on formal discrimination claims necessarily

overlook those incidents that go unnoticed or

unreported, these records provide a rare oppor-

tunity to witness detailed descriptions of dis-

crimination events across a wide range of social

domains not typically observed in conventional

research designs.

Other studies use discrimination claims, not

to assess patterns of discrimination, but to

investigate trends in the application of an-

tidiscrimination law. Nielsen & Nelson (2005)

provide an overview of research in this area,

examining the pathways by which potential

claims (or perceived discrimination) develop

into formal legal action, or conversely the

many points at which potential claims are de-

ﬂected from legal action. Hirsh & Kornrich

(2008) examine how characteristics of the work-

place and institutional environment affect vari-

ation in the incidence of discrimination claims

and their veriﬁcation by EEOC investigators.

Donohue & Siegelman (1991, 2005) analyze

discrimination claims from 1970 through 1997

to chart changes in the nature of antidiscrim-

ination enforcement over time. The overall

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volume of discrimination claims increased sub-

stantially over this period, though the compo-

sition of claims shifted away from an emphasis

on racial discrimination toward a greater em-

phasis on gender and disability discrimination.

Likewise, the types of employment discrimina-

tion claims have shifted from an emphasis on

hiring discrimination to an overwhelming em-

phasis on wrongful termination, and class ac-

tion suits have become increasingly rare. The

authors interpret these trends not as indicators

of changes in the actual distribution of discrim-

ination events, but rather as reﬂections of the

changing legal environment in which discrim-

ination cases are pursued (including, for exam-

ple, changes to civil rights law and changes in

the receptivity of the courts to various types

of discrimination claims), which themselves

may have implications for the expression of

discrimination (Donohue & Siegelman 1991,

2005).

Finally, a number of researchers have ex-

ploited changes in civil rights and antidiscrim-

ination laws as a source of exogenous variation

through which to measure changes in discrim-

ination (see Holzer & Ludwig 2003). Freeman

(1973, see table 6 therein), for example, inves-

tigates the effectiveness of federal EEO laws

by comparing the black-white income gap be-

fore and after passage of the Civil Rights Act

of 1964. Heckman & Payner (1989) use mi-

crodata from textile plants in South Carolina

to study the effects of race on employment be-

tween 1940 and 1980, concluding that federal

antidiscrimination policy resulted in a signiﬁ-

cant improvement in black economic status be-

tween 1965 and 1975. More recent studies ex-

ploiting changes in the legal context include

Kelly & Dobbin (1998), who examine the ef-

fects of changing enforcement regimes on em-

ployers’ implementation of diversity initiatives;

Kalev & Dobbin (2006), who examine the rela-

tive impact of compliance reviews and lawsuits

on the representation of women and minorities

in management positions; and a volume edited

by Skrentny (2001), which examines many of

the complex and unexpected facets related to

the rise, expansion, and impact of afﬁrmative

action and diversity policies in the United States

and internationally.

Although no research method is without

ﬂaws, careful consideration of the range of

methods available helps to match one’s research

question with the appropriate empirical strat-

egy. Comparisons across studies can help to

shed light on the relative strengths and weak-

nesses of existing methodological approaches

(see National Research Council 2004). At the

same time, one must keep in mind that the na-

ture of discrimination may itself be a moving

target, with the forms and patterns of discrim-

ination shifting over time and across domains

(see Massey 2005, p. 148). These complexities

challenge our traditional modes of operational-

ization and encourage us to continue to update

and reﬁne our measures to allow for an adequate

accounting of contemporary forms of racial

discrimination.

IS DISCRIMINATION STILL

A PROBLEM?

Simple as it may be, one basic question that

preoccupies the contemporary literature on dis-

crimination centers around its continuing rel-

evance. Whereas 50 years ago acts of discrim-

ination were overt and widespread, today it is

harder to assess the degree to which everyday

experiences and opportunities may be shaped

by ongoing forms of discrimination. Indeed,

the majority of white Americans believe that

a black person today has the same chance at

getting a job as an equally qualiﬁed white per-

son, and only a third believe that discrimination

is an important explanation for why blacks do

worse than whites in income, housing, and jobs

(Pager 2007a). Academic literature has likewise

questioned the relevance of discrimination for

modern-day outcomes, with the rising impor-

tance of skill, structural changes in the econ-

omy, and other nonracial factors accounting for

increasing amounts of variance in individual

outcomes (Heckman 1998, Wilson 1978). In-

deed, discrimination is not the only nor even the

most important factor shaping contemporary

opportunities. Nevertheless, it is important to

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understand when and how discrimination does

play a role in the allocation of resources and

opportunities. In the following discussion, we

examine the evidence of discrimination in four

domains: employment, housing, credit markets,

and consumer markets. Although not an ex-

haustive review of the literature, this discussion

aims to identify the major ﬁndings and debates

within each of these areas of research.

Employment

Although there have been some remarkable

gains in the labor force status of racial mi-

norities, signiﬁcant disparities remain. African

Americans are twice as likely to be unemployed

as whites (Hispanics are only marginally so),

and the wages of both blacks and Hispanics con-

tinue to lag well behind those of whites (author’s

analysis of Current Population Survey, 2006). A

long line of research has examined the degree

to which discrimination plays a role in shaping

contemporary labor market disparities.

Experimental audit studies focusing on hir-

ing decisions have consistently found strong ev-

idence of racial discrimination, with estimates

of white preference ranging from 50% to 240%

(Cross et al. 1989, Turner et al. 1991, Fix &

Struyk 1993, Bendick et al. 1994; see Pager

2007a for a review). For example, in a study

by Bertrand & Mullainathan (2004), the re-

searchers mailed equivalent resumes to em-

ployers in Boston and Chicago using racially

identiﬁable names to signal race (for example,

names like Jamal and Lakisha signaled African

Americans, while Brad and Emily were asso-

ciated with whites).

White names triggered a

Field experiments that rely on contact by mail (rather than in

person) are referred to as correspondence studies. Although

these studies are typically limited to a more restricted range

of job openings than are in-person audit studies, and although

the signaling of race is somewhat more complicated (see Fryer

& Levitt 2004 for a discussion of the race-class association

among distinctively African American names), these studies

are not vulnerable to the concerns over experimenter effects

that are relevant in in-person studies (see Heckman 1998).

For a review of correspondence studies in international con-

texts, including a range of ethnic groups, see Riach & Rich

(2002).

callback rate that was 50% higher than that of

equally qualiﬁed black applicants. Further, their

study indicated that improving the qualiﬁca-

tions of applicants beneﬁted white applicants

but not blacks, thus leading to a wider racial gap

in response rates for those with higher skill.

Statistical studies of employment outcomes

likewise reveal large racial disparities unac-

counted for by observed human capital char-

acteristics. Tomaskovic-Devey et al. (2005)

present evidence from a ﬁxed-effects model

indicating that black men spend signiﬁcantly

more time searching for work, acquire less work

experience, and experience less stable employ-

ment than do whites with otherwise equiva-

lent characteristics. Wilson et al. (1995) ﬁnd

that, controlling for age, education, urban lo-

cation, and occupation, black male high school

graduates are 70% more likely to experience

involuntary unemployment than whites with

similar characteristics and that this disparity

increases among those with higher levels of

education. At more aggregate levels, research

points to the persistence of occupational seg-

regation, with racial minorities concentrated in

jobs with lower levels of stability and author-

ity and with fewer opportunities for advance-

ment (Parcel & Mueller 1983, Smith 2002). Of

course, these residual estimates cannot control

for all relevant factors, such as motivation, ef-

fort, access to useful social networks, and other

factors that may produce disparities in the ab-

sence of direct discrimination. Nevertheless,

these estimates suggest that blacks and whites

with observably similar human capital charac-

teristics experience markedly different employ-

ment outcomes.

Unlike the cases of hiring and employ-

ment, research on wage disparities comes to

more mixed conclusions. An audit study by

Bendick et al. (1994) ﬁnds that, among those

testers who were given job offers, whites

were offered wages that were on average

15 cents/hour higher than their equally qual-

iﬁed black test partners; audit studies in gen-

eral, however, provide limited information on

wages, as many testers never make it to the wage

setting stage of the employment process. Some

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statistical evidence comes to similar conclu-

sions. Cancio et al. (1996), for example, ﬁnd

that, controlling for parental background, ed-

ucation, work experience, tenure, and train-

ing, white men earn roughly 15% more than

comparable blacks (white women earned 6%

more than comparable black women). Farkas &

Vicknair (1996), however, using a different

dataset, ﬁnd that the addition of controls for

cognitive ability eliminates the racial wage gap

for young black and white full-time workers.

According to the authors, these ﬁndings suggest

that racial differences in labor market outcomes

are due more to factors that precede labor mar-

ket entry (e.g., skill acquisition) rather than dis-

crimination within the labor market (see also

Neal & Johnson 1996).

Overall, then, the literature points toward

consistent evidence of discrimination in access

to employment, but less consistent evidence of

discrimination in wages. Differing methodolo-

gies and/or model speciﬁcation may account for

some of the divergent results. But there is also

reason to believe that the processes affecting ac-

cess to employment (e.g., the inﬂuence of ﬁrst

impressions, the absence of more reliable in-

formation on prospective employees, and min-

imal legal oversight) may be more subject to

discriminatory decision making than those af-

fecting wages. Further, the ﬁndings regarding

employment and wages may be in part causally

related, as barriers to labor market entry will

lead to a more select sample of black wage earn-

ers, reducing measured racial disparities (e.g.,

Western & Pettit 2005). These ﬁndings point

to the importance of modeling discrimination

as a process rather than a single-point out-

come, with disparities in premarket skills acqui-

sition, barriers to labor market entry, and wage

differentials each part of a larger employment

trajectory and shaped to differing degrees by

discrimination.

Housing

Residential segregation by race remains a

salient feature of contemporary American

cities. Indeed, African Americans were as seg-

regated from whites in 1990 as they had been

at the start of the twentieth century, and lev-

els of segregation appear unaffected by ris-

ing socioeconomic status (Massey & Denton

1993). Although segregation appears to have

modestly decreased between 1980 and 2000

(Logan et al. 2004), blacks (and to a lesser ex-

tent other minority groups) continue to experi-

ence patterns of residential placement markedly

different from whites. The degree to which

discrimination contributes to racial disparities

in housing has been a major preoccupation

of social scientists and federal housing agents

(Charles 2003).

The vast majority of the work on dis-

crimination in housing utilizes experimen-

tal audit data. For example, between 2000

and 2002 the Department of Housing and

Urban Development conducted an extensive

series of audits measuring housing discrimina-

tion against blacks, Latinos, Asians, and Native

Americans, including nearly 5500 paired tests in

nearly 30 metropolitan areas [see Turner et al.

(2002), Turner & Ross (2003a); see also Hakken

(1979), Feins & Bratt (1983), Yinger (1986),

Roychoudhury & Goodman (1992, 1996) for

additional, single-city audits of housing dis-

crimination]. The study results reveal bias

across multiple dimensions, with blacks experi-

encing consistent adverse treatment in roughly

one in ﬁve housing searches and Hispanics

experiencing consistent adverse treatment in

roughly one out of four housing searches (both

rental and sales).

Measured discrimination

took the form of less information offered about

units, fewer opportunities to view units, and, in

the case of home buyers, less assistance with ﬁ-

nancing and steering into less wealthy commu-

nities and neighborhoods with a higher propor-

tion of minority residents.

Asian renters and homebuyers experienced similar levels of

consistent adverse treatment, though the effects were not

statistically signiﬁcant for renters. The highest levels of dis-

crimination among the groups was experienced by Native

American renters, for whom reduced access to information

comprised the bulk of differential treatment (Turner & Ross

2003a,b).

188 Pager

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Generally, the results of the 2000 Housing

Discrimination Study indicate that aggregate

levels of discrimination against blacks declined

modestly in both rentals and sales since 1989

(although levels of racial steering increased).

Discrimination against Hispanics in housing

sales declined, although Hispanics experienced

increasing levels of discrimination in rental

markets.

Other research using telephone audits fur-

ther points to a gender and class dimension

of racial discrimination in which black women

and/or blacks who speak in a manner associated

with a lower-class upbringing suffer greater dis-

crimination than black men and/or those sig-

naling a middle-class upbringing (Massey &

Lundy 2001, Purnell et al. 1999). Context also

matters in the distribution of discrimination

events (Fischer & Massey 2004). Turner &

Ross (2005) report that segregation and class

steering of blacks occurs most often when ei-

ther the housing or the ofﬁce of the real es-

tate agent is in a predominantly white neigh-

borhood. Multi-city audits likewise suggest that

the incidence of discrimination varies substan-

tially across metropolitan contexts (Turner et al.

2002).

Moving beyond evidence of exclusionary

treatment, Roscigno and colleagues (2007) pro-

vide evidence of the various forms of housing

discrimination that can extend well beyond the

point of purchase (or rental agreement). Ex-

amples from a sample of discrimination claims

ﬁled with the Civil Rights Commission of

Ohio point to the failure of landlords to pro-

vide adequate maintenance for housing units,

to harassment or physical threats by managers

or neighbors, and to the unequal enforcement

of a residential association’s rules.

Overall, the available evidence suggests that

discrimination in rental and housing markets

remains pervasive. Although there are some

promising signs of change, the frequency with

which racial minorities experience differential

treatment in housing searches suggests that

discrimination remains an important barrier

to residential opportunities. The implications

of these trends for other forms of inequality

(health, employment, wealth, and inheritance)

are discussed below.

Credit Markets

Whites possess roughly 12 times the wealth of

African Americans; in fact, whites near the bot-

tom of the income distribution possess more

wealth than blacks near the top of the income

distribution (Oliver & Shapiro 1997, p. 86).

Given that home ownership is one of the most

signiﬁcant sources of wealth accumulation, pat-

terns that affect the value and viability of home

ownership will have an impact on wealth dispar-

ities overall. Accordingly, the majority of work

on discrimination in credit markets focuses on

the speciﬁc case of mortgages.

Available evidence suggests that blacks and

Hispanics face higher rejection rates and less

favorable terms in securing mortgages than do

whites with similar credit characteristics (Ross

& Yinger 1999). Oliver & Shapiro (1997, p.

142) report that blacks pay more than 0.5%

higher interest rates on home mortgages than

do whites and that this difference persists with

controls for income level, date of purchase, and

age of buyer.

The most prominent study of the effect of

race on rejection rates for mortgage loans is by

Munnell et al. (1996), which uses 1991 Home

Mortgage Disclosure Act data supplemented by

data from the Federal Reserve Bank of Boston,

including individual applicants’ ﬁnancial, em-

ployment, and property background variables

that lenders use to calculate the applicants’

probability of default. Accounting for a range of

variables linked to risk of default, cost of default,

loan characteristics, and personal and neighbor-

hood characteristics, they ﬁnd that black and

Hispanic applications were 82% more likely to

be rejected than were those from similar whites.

Critics argued that the study was ﬂawed on

the basis of the quality of the data collected

(Horne 1994), model speciﬁcation problems

(Glennon & Stengel 1994), omitted variables

(Zandi 1993, Liebowitz 1993, Horne 1994, Day

& Liebowitz 1996), and endogenous explana-

tory variables (see Ross & Yinger 1999 for a full

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explication of the opposition), although rejoin-

ders suggest that the race results are affected

little by these modiﬁcations (Ross & Yinger

1999; S.L. Ross & G.M.B. Tootell, unpublished

manuscript).

Audit research corroborates evidence of

mortgage discrimination, ﬁnding that black

testers are less likely to receive a quote for a

loan than are white testers and that they are

given less time with the loan ofﬁcer, are quoted

higher interest rates, and are given less coach-

ing and less information than are comparable

white applicants (for a review, see Ross & Yinger

2002).

In addition to investigating the race of

the applicant, researchers have investigated

the extent to which the race of the neigh-

borhood affects lending decisions, otherwise

known as redlining. Although redlining is a

well-documented factor in the origins of con-

temporary racial residential segregation (see

Massey & Denton 1993), studies after the

1974 Equal Credit Opportunity Act, which

outlawed redlining, and since the 1977 Com-

munity Reinvestment Act, which made ille-

gal having a smaller pool of mortgage funds

available in minority neighborhoods than in

similar white neighborhoods, ﬁnd little evi-

dence of its persistence (Benston & Horsky

1991, Schafer & Ladd 1981, Munnell et al.

1996). This conclusion depends in part, how-

ever, on one’s deﬁnition of neighborhood-based

discrimination. Ross & Yinger (1999) distin-

guish between process-based and outcome-

based redlining, with process-based redlining

referring to “whether the probability that a

loan application is denied is higher in mi-

nority neighborhoods than in white neighbor-

hoods, all else equal” whereas outcome-based

redlining refers to smaller amounts of mortgage

funding available to minority neighborhoods

relative to comparable white neighborhoods.

Although evidence on both types of redlin-

ing is mixed, several studies indicate that,

controlling for demand, poor and/or minor-

ity neighborhoods have reduced access to

mortgage funding, particularly from main-

stream lenders (Phillips-Patrick & Rossi 1996,

Siskin & Cupingood 1996; see also Ladd

1998 for methodological issues in measuring

redlining).

As a ﬁnal concern, competition and dereg-

ulation of the banking industry have led

to greater variability in conditions of loans,

prompting the label of the “new inequality” in

lending (Williams et al. 2005, Holloway 1998).

Rather than focusing on rejection rates, these

researchers focus on the terms and conditions

of loans, in particular whether a loan is favor-

able or subprime (Williams et al. 2005, Apgar

& Calder 2005, Squires 2003). Immergluck

& Wiles (1999) have called this the “dual-

mortgage market” in which prime lending is

given to higher income and white areas, while

subprime and predatory lending is concentrated

in lower-income and minority communities

(see also Dymski 2006, pp. 232–36). Williams

et al. (2005), examining changes between 1993

and 2000, ﬁnd rapid gains in loans to under-

served markets from specialized lenders: 78%

of the increase in lending to minority neigh-

borhoods was from subprime lenders, and 72%

of the increase in reﬁnance lending to blacks

was from subprime lenders. Further, the au-

thors ﬁnd that “even at the highest income

level, blacks are almost three times as likely to

get their loans from a subprime lender as are

others” (p. 197; see also Calem et al. 2004). Al-

though the disproportionate rise of subprime

lending in minority communities is not solely

the result of discrimination, some evidence sug-

gests that in certain cases explicit racial tar-

geting may be at work. In two audit studies

in which creditworthy testers approached sub-

prime lenders, whites were more likely to be re-

ferred to the lenders’ prime borrowing division

than were similar black applicants (see Williams

et al. 2005). Further, subprime lenders quoted

the black applicants very high rates, fees, and

closing costs that were not correlated with risk

(Williams et al. 2005).

See Stuart (2003) for a useful discussion of how economic

risk became deﬁned in the mortgage lending industry and

how this approach has impacted discrimination.

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Not all evidence associated with credit mar-

ket discrimination is bad news. Indeed, between

1989 and 2000 the number of mortgage loans

to blacks and Hispanics nationwide increased

60%, compared with 16% for whites, sug-

gesting that some convergence is taking place

(Turner et al. 2002). Nevertheless, the evidence

indicates that blacks and Hispanics continue to

face higher rejection rates and receive less fa-

vorable terms than whites of equal credit risk. At

the time of this writing, the U.S. housing mar-

ket is witnessing high rates of loan defaults and

foreclosures, resulting in large part from the

rise in unregulated subprime lending; the con-

sequences of these trends for deepening racial

inequalities have yet to be fully explored.

Consumer Markets

Relative to employment, housing, and credit

markets, far less research focuses on discrimi-

nation in consumer transactions. Nevertheless,

there are some salient disparities. A 2005 re-

port by New Jersey Citizen Action using data

from two New Jersey lawsuits found that, be-

tween 1993 and 2000, blacks and Hispanics

were disproportionately subject to ﬁnancing

markup charges at car dealerships, with mi-

nority customers paying an average of $339

more than whites with similar credit histories.

Harris et al. (2005) analyze federal court cases

of consumer discrimination ﬁled from 1990 to

2002, examining the dimensions of subtle and

overt degradation (including extended wait-

ing periods, prepay requirements, and higher

prices, as well as increased surveillance and

verbal and/or physical attacks) and subtle and

overt denial of goods and services. They re-

port cases ﬁled in hotels, restaurants, gas sta-

tions, grocery/food stores, clothing stores, de-

partment stores, home improvement stores,

and ofﬁce equipment stores ﬁled by mem-

bers of many racial minority groups. Likewise,

Feagin & Sikes (1994) document the myriad cir-

cumstances in which their middle-class African

American respondents report experiences of

discrimination, ranging from poor service in

restaurants to heightened surveillance in de-

partment stores to outright harassment in pub-

lic accommodations. Together, these studies

suggest that discrimination in consumer mar-

kets continues to impose both psychic and ﬁ-

nancial costs on minority consumers.

Much of the empirical work on discrimina-

tion in consumer markets has focused speciﬁ-

cally on the case of car purchases, which, aside

from housing, represent one of the most sig-

niﬁcant forms of personal consumption expen-

ditures (Council of Economic Advisers 1997,

table B-14).

Ayres & Siegelman (1995) con-

ducted an audit study in Chicago in which

testers posed as customers seeking to purchase a

new car, approaching dealers with identical re-

hearsed bargaining strategies. The results show

that dealers were less ﬂexible in their negotia-

tions with blacks, resulting in a signiﬁcant dis-

parity in the ultimate distribution of prices (rel-

ative to white men, black men and black women

paid on average $1132 and $446 more, respec-

tively) (Ayres 1995). Although analyses using

microdata have come to more mixed conclu-

sions about the relevance of race in actual car

purchase prices (see Goldberg 1996, Morton

et al. 2003), the audit evidence suggests that

simply equating information, strategy, and

credit background is insufﬁcient to eliminate

the effects of race on a customer’s bargaining

position.

Although much of the literature on con-

sumer discrimination focuses on the race of the

individual customer, a few studies have also in-

vestigated the effects of community characteris-

tics on the pricing of goods and services. Graddy

(1997), for example, investigated discrimination

in pricing among fast food chains on the basis

of the race and income characteristics of a local

area. Using information about prices from over

400 fast food restaurants, matched with 1990

census data for zip code–level income, race,

crime, and population density, and control-

ling for a host of neighborhood, business, and

There is also a growing literature in economics that focuses

on online auctions (e.g., eBay

R

), allowing researchers to test

theories about consumer discrimination in more highly con-

trolled (but real-world) environments (e.g., List 2004).

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state-level characteristics, the author ﬁnds that

a 50% increase in a zip code’s percent black

is associated with a 5% increase in the price

of a meal, corresponding to roughly 15 cents

per meal. The study is a useful example of how

discrimination, especially in consumer markets,

might be examined as a function of segregated

residential patterns, suggesting a more contex-

tualized approach to studying discrimination

(see also Moore & Roux 2006).

Evidence of consumer discrimination points

to a range of situations in which minority cus-

tomers receive poorer service or pay more than

their white counterparts. Although few indi-

vidual incidents represent debilitating experi-

ences in and of themselves, the accumulation of

such experiences over a lifetime may represent

an important source of chronic stress (Kessler

et al. 1990) or distrust of mainstream institu-

tions (Feagin & Sikes 1994, Bobo & Thompson

2006). Indeed, the cumulative costs of racial dis-

crimination are likely to be far higher than any

single study can document.

WHAT CAUSES

DISCRIMINATION?

Measuring the prevalence of discrimination is

difﬁcult; identifying its causes is far more so.

Patterns of discrimination can be shaped by in-

ﬂuences at many different levels, and the spe-

ciﬁc mechanisms at work are often difﬁcult

to observe. Following Reskin (2003), in this

discussion we consider inﬂuences that operate

at the individual, organizational, and societal

level. Each level of analysis contains its own

range of dynamics that may instigate or medi-

ate expressions of discrimination. Although by

no means an exhaustive catalog, this discussion

provides some insight into the range of factors

that may underlie various forms of discrimina-

tory behavior.

Intrapsychic Factors

Much of the theoretical work on discrimina-

tion aims to understand what motivates actors

to discriminate along racial lines. Although in-

ternal motivations are difﬁcult to measure em-

pirically (Reskin 2003), their relevance to the

understanding and conceptualization of dis-

crimination has been central (Quillian 2006).

Classical works in this area emphasized the role

of prejudice or racial animus as key under-

pinnings of discrimination, with feelings and

beliefs about the inferiority or undesirability

of certain racial groups associated with subse-

quent disadvantaging behavior (Allport 1954,

Pettigrew 1982). Conceptualizations of preju-

dice range from individual-level factors, such

as an authoritarian personality (Adorno et al.

1950) or a “taste for discrimination” (Becker

1957), to more instrumental concerns over

group competition and status closure (Blumer

1958, Blalock 1956, Jackman 1994, Tilly 1998).

Scholars have characterized changes in the

nature of racial prejudice over the past 50

years—as expressed through racial attitudes—

as shifting toward the endorsement of equal

treatment by race and a repudiation of

overt forms of prejudice and discrimination

(Schuman et al. 2001). Some, however, ques-

tion the degree to which these visible changes

reﬂect the true underlying sentiments of

white Americans or rather a more superﬁ-

cial commitment to racial equality. Theories

of “symbolic racism” (Kinder & Sears 1981),

“modern racism” (McConahay 1986), and

“laissez-faire racism” (Bobo et al. 1997), for ex-

ample, each point to the disconnect between

attitudes of principle (e.g., racial equality as an

ideal) and policy attitudes (e.g., government ac-

tion to achieve those ideals) as indicative of lim-

ited change in underlying racial attitudes (but

see Sniderman et al. 1991 for a countervailing

view). These new formulations of prejudice in-

clude a blending of negative affect and beliefs

about members of certain groups with more

abstract political ideologies that reinforce the

status quo.

Whereas sociological research on prejudice

is based largely on explicit attitudes measured

through large-scale surveys, psychologists have

increasingly turned to measures of implicit

prejudice, or forms of racial bias that operate

without conscious awareness yet can inﬂuence

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cognition, affect, and behavior (Greenwald &

Banaji 1995, Fazio & Olson 2003). Experiments

in which subjects are unconsciously primed

with words or images associated with African

Americans reveal strong negative racial associ-

ations, even among those who consciously re-

pudiate prejudicial beliefs. Whereas the links

between explicit and implicit forms of preju-

dice and between implicit prejudice and behav-

ior remain less well understood, the presence of

widespread unconscious racial biases has been

ﬁrmly established across a multitude of contexts

(see Lane et al. 2007).

Parallel to the study of racial prejudice (the

more affective component of racial attitudes)

is a rich history of research on racial stereo-

types (a more cognitive component). Whereas

many general racial attitudes have shifted to-

ward more egalitarian beliefs, the content and

valence of racial stereotypes appears to have

changed little over time (Devine & Elliot 1995,

Lane et al. 2007).

White Americans continue

to associate African Americans with character-

istics such as lazy, violence-prone, and welfare-

dependent and Hispanics with characteristics

such as poor, unintelligent, and unpatriotic

(Smith 1991, Bobo & Kluegel 1997). Culturally

embedded stereotypes about racial differences

are reﬂected in both conscious and unconscious

evaluations (Greenwald & Banaji 1995) and

may set the stage for various forms of discrim-

inatory treatment (Farley et al. 1994).

Researchers differ in perspectives regard-

ing the cognitive utility and accuracy of stereo-

types. Whereas many social psychologists view

stereotypes as “faulty or inﬂexible generaliza-

tion[s]” (Allport 1954), economic theories of

statistical discrimination emphasize the cogni-

tive utility of group estimates as a means of deal-

ing with the problems of uncertainty (Phelps

Indeed, social psychological research points to the hard-

wired tendency toward categorization, with preferences for

in-groups and the stereotyping of out-groups a natural out-

growth of human cognition (Fiske 1998). Although the social

context certainly shapes the boundaries of social groups and

the content of stereotypes, this cognitive impulse likely con-

tributes to the resilience of social categorization and stereo-

types (Massey 2007).

1972, Arrow 1972). Group-level estimates of

difﬁcult-to-observe characteristics (such as av-

erage productivity levels or risk of loan default)

may provide useful information in the screening

of individual applicants. Although some impor-

tant research questions the accuracy of group-

level estimates (e.g., Bielby & Baron 1986), the

mechanism proposed in models of statistical

discrimination—rational actors operating un-

der conditions of uncertainty—differ substan-

tially from those based on racial prejudice. In-

deed, much of the literature across the various

domains discussed above attempts to discern

whether discrimination stems primarily from

racial animus or from these more instrumen-

tal adaptations to information shortages (e.g.,

Ayres & Siegelman 1995).

The various factors discussed here, in-

cluding prejudice, group competition, modern

racism, stereotypes, and statistical discrimina-

tion, represent just a few of the varied intrapsy-

chic inﬂuences that may affect discrimination.

It is important to emphasize, however, that the

behavioral manifestation of discrimination does

not allow one readily to assume any particu-

lar underlying intrapsychic motivation, just as a

lack of discrimination does not presume the ab-

sence of prejudice (see Merton 1970). Contin-

ued efforts to measure the processes by which

internal states translate into discriminatory ac-

tion [or what Reskin (2003) calls a shift from

“motives” to “mechanisms”] will help to illu-

minate the underlying causes of contemporary

racial discrimination.

Organizational Factors

Beyond the range of interpersonal and intrapsy-

chic factors that may inﬂuence discrimination,

a large body of work directs our attention to-

ward the organizational contexts in which indi-

vidual actors operate. Baron & Bielby’s (1980)

classic article established a central role for orga-

nizations in stratiﬁcation research, arguing for

a framework that links “the ‘macro’ and ‘micro’

dimensions of work organization and inequal-

ity” (p. 738). More recent theoretical and em-

pirical advances in the ﬁeld of discrimination

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have maintained a strong interest in the role of

organizations as a key structural context shap-

ing inequality.

Tilly’s (1998) analysis of durable inequality

emphasizes the importance of organizational

dynamics in creating and maintaining group

boundaries. “Durable inequality arises because

people who control access to value-producing

resources solve pressing organizational prob-

lems by means of categorical distinctions” (p. 8).

Although actors “rarely set out to manufacture

inequality as such,” their efforts to secure access

to valued resources by distinguishing between

insiders and outsiders, ensuring solidarity and

loyalty, and monopolizing important knowl-

edge often make use of (and thereby reinforce

the salience of) established categories in the ser-

vice of facilitating organizational goals (p. 11).

Tilly’s analysis places organizational structure

at the center stage, arguing that “the reduction

or intensiﬁcation of racist, sexist, or xenopho-

bic attitudes will have relatively little impact

on durable inequality, whereas the introduction

of new organizational forms ...will have great

impact” (p. 15). In line with these arguments,

an important line of sociological research has

sought to map the dimensions of organizational

structures that may attenuate or exacerbate the

use of categorical distinctions and, correspond-

ingly, the incidence of discrimination (Vallas

2003).

Much of the empirical literature explor-

ing organizational mechanisms of discrimi-

nation has focused speciﬁcally on how or-

ganizational practices mediate the cognitive

biases and stereotypes of actors (Baron &

Pfeffer 1994). Indeed, Reskin (2000) argues

that “the proximate cause of most discrimina-

tion is whether and how personnel practices in

work organizations constrain the biasing effects

of . . . automatic cognitive processes” (p. 320).

Petersen & Saporta (2004) take a bolder stance,

starting with the assumption that “discrimina-

tion is widespread, and employers discriminate

if they can get away with it” (p. 856). Rather

than asking why employers discriminate, then,

these authors look to the “opportunity struc-

ture for discrimination” (in their case, features

of job ladders within organizations) that allow

or inhibit the expression of discriminatory ten-

dencies (pp. 855–56).

In the following discussion, we brieﬂy con-

sider several important themes relevant to the

literature on organizational mechanisms of dis-

crimination. In particular, we examine how or-

ganizational structure and practices inﬂuence

the cognitive and social psychological processes

of decision makers (the role of formalized orga-

nizational procedures and diversity initiatives),

how organizational practices create disparate

outcomes that may be independent of decision

makers (the role of networks), and how organi-

zations respond to their broader environment.

The role of formalization. One important

debate in this literature focuses on the

degree to which formalized organizational

procedures can mitigate discrimination by

limiting individual discretion. The case of the

military (Moskos & Butler 1996), for example,

and the public sector more generally (DiPrete

& Soule 1986, Moulton 1990) provide exam-

ples in which highly rationalized systems of

hiring, promotion, and remuneration are asso-

ciated with an increasing representation of mi-

norities, greater racial diversity in positions of

authority, and a smaller racial wage gap. Like-

wise, in the private sector, formal and systematic

protocols for personnel management decisions

are associated with increases in the represen-

tation of racial minorities (Reskin et al. 1999,

Szafran 1982, Mittman 1992), and the use of

concrete performance indicators and formal-

ized evaluation systems has been associated with

reductions in racial bias in performance evalu-

ations (Krieger 1995, Reskin 2000).

Individual discretion has been associated

with the incidence of discrimination in credit

markets as well. For example, Squires (1994)

ﬁnds that credit history irregularities on pol-

icy applications were often selectively over-

looked in the case of white applicants. Con-

versely, Gates et al. (2002) report that the use

of automated underwriting systems (removing

lender discretion) was associated with a nearly

30% increase in the approval rate for minority

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and low-income clients and at the same time

more accurately predicted default than tradi-

tional methods. These ﬁndings suggest that for-

malized procedures can help to reduce racial

bias in ways that are consistent with goals of

organizational efﬁciency.

At the same time, increased bureaucratiza-

tion does not necessarily mitigate discrimina-

tory effects. According to Bielby (2000), rules

and procedures are themselves subject to the

inﬂuence of groups inside and outside the orga-

nization who “mobilize resources in a way that

advances their interests,” with competition be-

tween groups potentially undermining the neu-

trality of bureaucratic procedures (Bielby 2000,

p. 123; see also Ross & Yinger 2002, Acker

1989). Additionally, there is evidence that for-

malized criteria are often selectively enforced,

with greater ﬂexibility or leeway applied in the

case of majority groups (Wilson et al. 1999,

Squires 1994). Likewise, indications of racial

bias in performance evaluations cast doubt on

the degree to which even formalized assess-

ments of work quality can escape the inﬂuence

of race (McKay & McDaniel 2006). The degree

to which formalization can reduce or eliminate

discrimination, thus, remains open to debate,

with effects depending on the speciﬁc context

of implementation.

Diversity initiatives. Since the passage of Ti-

tle VII in the 1964 Civil Rights Act, most

large organizations have taken active steps

to signal compliance with antidiscrimination

laws. Deliberate organizational efforts to ad-

dress issues of discrimination (or the percep-

tion thereof), either in disparate treatment or

disparate impact, often are labeled as diversity

initiatives, and these practices are widespread.

Winterle (1992) cites a 1991 survey of organi-

zations demonstrating that roughly two-thirds

provided diversity training for managers, half

provided a statement on diversity from top

management, and roughly one-third provided

diversity training for employees and/or had a

diversity task force (see also Wheeler 1995,

Edelman et al. 2001). Not all such initiatives,

however, have any proven relationship to ac-

tual diversity outcomes. Kalev et al. (2006) ex-

amine the efﬁcacy of active organizational ef-

forts to promote diversity, focusing speciﬁcally

on three of the most common organizational

practices: the implementation of organizational

accountability by creating new positions or

taskforces designed speciﬁcally to address di-

versity issues, managerial bias training, and

mentoring and network practices. They ﬁnd

that practices designed to increase organiza-

tional authority and accountability are the most

effective in increasing the number of women

and minorities in management positions. Net-

working and mentoring programs appear some-

what useful, whereas programs focused on re-

ducing bias (e.g., diversity training) have little

effect. These results suggest that organizational

initiatives to reduce racial disparities can be ef-

fective, but primarily when implemented with

concrete goals to which organizational leader-

ship is held accountable.

Taking a broader look at race-targeted em-

ployment policies, Holzer & Neumark (2000)

investigate the effects of afﬁrmative action on

the recruitment and employment of minori-

ties and women. They ﬁnd that afﬁrmative ac-

tion is associated with increases in the number

of recruitment and screening practices used by

employers, increases in the number of minor-

ity applicants and employees, and increases in

employers’ tendencies to provide training and

formal evaluations of employees. Although the

use of afﬁrmative action in hiring is associated

with somewhat weaker credentials among mi-

nority hires, actual job performance appears un-

affected.

Note, however, that the creation of new positions for di-

versity management may have its own disadvantages, inad-

vertently diverting minority employees away from more de-

sirable management trajectories. Collins (1989, 1993), for

example, ﬁnds that upwardly mobile blacks are frequently

tracked into racialized management jobs or into jobs that

speciﬁcally deal with diversity issues, with black customers,

or with relations with the black community. According to

Collins, these jobs are also characterized by greater vulner-

ability to downsizing and fewer opportunities for advance-

ment.

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The role of networks. In addition to exam-

ining how organizational policies and practices

shape the behavior of decision makers and gate-

keepers, researchers must acknowledge that

some mechanisms relevant to the perpetuation

of categorical inequality might operate inde-

pendently of the actions of individuals. Indeed,

many organizational policies or procedures can

impose disparate impact along racial lines with

little direct inﬂuence from individual decision

makers. The case of networks represents one

important example. The role of networks in

hiring practices is extremely well documented,

with networks generally viewed as an efﬁcient

strategy for matching workers to employers

with advantages for both job seekers (e.g.,

Granovetter 1995) and employers (e.g.,

Fernandez et al. 2000). At the same time,

given high levels of social segregation (e.g.,

McPherson et al. 2001), the use of referrals is

likely to reproduce the existing racial compo-

sition of the company and to exclude members

of those groups not already well represented

(Braddock & McPartland 1987). In an analysis

of noncollege jobs, controlling for spatial

segregation, occupational segregation, city,

and ﬁrm size, Mouw (2002) ﬁnds that the use

of employee referrals in predominantly white

ﬁrms reduces the probability of a black hire by

nearly 75% relative to the use of newspaper

ads.

Petersen et al. (2000) using data on a

high-technology organization over a 10-year

period ﬁnd that race differences in hiring are

eliminated when the method of referral is

considered, suggesting that the impact of social

networks on hiring outcomes is strong and

may be more important than any direct action

taken by organization members. Irrespective of

an employer’s personal racial attitudes, the use

of employee referrals is likely to reproduce the

existing racial composition of an organization,

restricting valuable employment opportunities

Mouw (2002) does not ﬁnd evidence that this sorting process

affects aggregate employment rates, although the segregation

of job opportunities is itself associated with racial differences

in job quality and stability (Parcel & Mueller 1983).

from excluded groups (see also Royster 2003,

Waldinger & Lichter 2003).

Networks and network composition may

matter not only for the purposes of obtain-

ing information and referrals for jobs, but

also within jobs for the purposes of infor-

mal mentoring, contacts, and relevant informa-

tion important to advancement (Ibarra 1993,

Grodsky & Pager 2001). Mechanisms of ho-

mosocial reproduction, or informal preferences

for members of one’s own group, can lead to

network conﬁgurations of informal mentorship

and sponsorship that contribute to the preserva-

tion of existing status hierarchies (Kanter 1977;

see also Elliot & Smith 2001, Sturm 2001).

The wide-ranging economic consequences that

follow from segregated social networks corre-

sponds to what Loury (2001, p. 452) refers to

as the move from “discrimination in contract”

to “discrimination in contact.” According to

Loury, whereas earlier forms of discrimination

primarily reﬂected explicit differences in the

treatment of racial groups, contemporary forms

of discrimination are more likely to be perpetu-

ated through informal networks of opportunity

that, though ostensibly race-neutral, systemat-

ically disadvantage members of historically ex-

cluded groups.

Organizations in context. Much of the re-

search discussed above considers the organiza-

tion as a context in which decisions and pro-

cedures that affect discriminatory treatment

are shaped. But organizations themselves are

likewise situated within a larger context, with

prevailing economic, legal, and social environ-

ments conditioning organizational responses

(Reskin 2003). When labor markets expand

or contract, organizations shift their recruit-

ment and termination/retention strategies in

ways that adapt to these broader forces (e.g.,

Freeman & Rodgers 1999). When antidiscrim-

ination laws are passed or amended, organiza-

tions respond in ways that signal compliance

(Dobbin et al. 1993), with the impact of these

measures varying according to shifting levels or

strategies of government enforcement (Kalev &

Dobbin 2006, Leonard 1985). At the same time,

196 Pager

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organizations are not merely passive recipients

of the larger economic and legal context. In the

case of the legal environment, for example, or-

ganizations play an active role in interpreting

and shaping the ways that laws are translated

into practice. Edelman (1992), Dobbin et al.

(1993), and Dobbin & Sutton (1998) have each

demonstrated ways in which the U.S. federal

government’s lack of clear guidance regarding

compliance with antidiscrimination laws and

regulations allowed organizations to establish

and legitimate their own compliance measures.

According to Edelman (1992, p. 1542), “orga-

nizations do not simply ignore or circumvent

weak law, but rather construct compliance in a

way that, at least in part, ﬁts their interests.” Or-

ganizational actors, then, can wind up playing

the dual role of both deﬁning and demonstrat-

ing compliance, with important implications

for the nature, strength, and impact of antidis-

crimination laws and likewise for the patterns of

discrimination that emerge in these contexts.

Organizations occupy a unique position

with respect to shaping patterns of discrimina-

tion. They mediate both the cognitive and atti-

tudinal biases of actors within the organization

as well as the inﬂuence of broader economic

and legal pressures applied from beyond. Rec-

ognizing the speciﬁc features of organizational

action that affect patterns of discrimination rep-

resents one of the most important contributions

of sociological research in this area. To date, the

vast majority of organizational research has fo-

cused on the context of labor markets; investi-

gations of organizational functioning in other

domains (e.g., real estate, retail sales, lending

institutions) would do much to further our un-

derstanding of how collective policies and prac-

tices shape the expression of discrimination.

Structural Factors

The majority of research on discrimination fo-

cuses on dynamics between individuals or small

groups. It is easiest to conceptualize discrimina-

tion in terms of the actions of speciﬁc individ-

uals, with the attitudes, prejudices, and biases

of majority group members shaping actions to-

ward minority group members. And yet, it is

important to recognize that each of these de-

cisions takes place within a broader social con-

text. Members of racial minority groups may

be systematically disadvantaged not only by

the willful acts of particular individuals, but

because the prevailing system of opportuni-

ties and constraints favors the success of one

group over another. In addition to the or-

ganizational factors discussed above, broader

structural features of a society can contribute

to unequal outcomes through the ordinary

functioning of its cultural, economic, and

political systems (see also National Research

Council 2004, chapter 11). The term structural

discrimination has been used loosely in the lit-

erature, along with concepts such as institu-

tional discrimination and structural or institu-

tional racism, to refer to the range of policies

and practices that contribute to the systematic

disadvantage of members of certain groups. In

the following discussion, we consider three dis-

tinct conceptualizations of structural discrim-

ination, each of which draws our attention to

the broader, largely invisible contexts in which

group-based inequalities may be structured and

reproduced.

A legacy of historical discrimination. This

ﬁrst conceptualization of structural discrimi-

nation stands furthest from conventional def-

initions of discrimination as an active and on-

going form of racial bias. By focusing on the

legacies of past discrimination, this emphasis

remains agnostic about the relevance of con-

temporary forms of discrimination that may

further heighten or exacerbate existing in-

equalities. And yet, the emphasis on structural

discrimination—as opposed to just inequality—

directs our attention to the array of discrim-

inatory actions that brought about present

day inequalities. The origins of contempo-

rary racial wealth disparities, for example, have

well-established links to historical practices of

redlining, housing covenants, racially targeted

federal housing policies, and other forms of ac-

tive discrimination within housing and lending

markets (e.g., Massey & Denton 1993). Setting

aside evidence of continuing discrimination in

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each of these domains, these historical practices

themselves are sufﬁcient to maintain extraordi-

narily high levels of wealth inequality through

the intergenerational transition of advantage

(the ability to invest in good neighborhoods,

good schools, college, housing assistance for

adult children, etc.) (Oliver & Shapiro 1997).

According to Conley (1999), even if we were to

eliminate all contemporary forms of discrimi-

nation, huge racial wealth disparities would per-

sist, which in turn underlie racial inequalities

in schooling, employment, and other social do-

mains (see also Lieberson & Fuguitt 1967). Re-

cent work based on formal modeling suggests

that the effects of past discrimination, partic-

ularly as mediated by ongoing forms of social

segregation, are likely to persist well into the

future, even in the absence of ongoing discrim-

ination (see Bowles et al. 2007, Lundberg &

Startz 1998).

These historical sources of discrimination

may become further relevant, not only in their

perpetuation of present-day inequalities, but

also through their reinforcement of contempo-

rary forms of stereotypes and discrimination. As

in Myrdal’s (1944) “principle of cumulation,”

structural disadvantages (e.g., poverty, jobless-

ness, crime) come to be seen as cause, rather

than consequence, of persistent racial inequal-

ity, justifying and reinforcing negative racial

stereotypes (pp. 75–78). Bobo et al. (1997, p. 23)

argue that “sharp black-white economic in-

equality and residential segregation...provide

the kernel of truth needed to regularly breathe

new life into old stereotypes about putative

black proclivities toward involvement in crime,

violence, and welfare dependency.” The per-

petuation of racial inequality through struc-

tural and institutional channels can thus be con-

ducive to reinforcing negative racial stereotypes

and shifting blame toward minorities for their

own disadvantage (see also Sunstein 1991, p. 32;

Fiske et al. 2002).

Contemporary state policies and practices.

This second conceptualization of structural dis-

crimination accords more with conventional

understandings of the term, placing its empha-

sis on those contemporary policies and practices

that systematically disadvantage certain groups.

Paradigmatic cases of structural discrimination

include the caste system in India, South Africa

under apartheid, or the United States during

Jim Crow—each of these representing soci-

eties in which the laws and cultural institutions

manufactured and enforced systematic inequal-

ities based on group membership. Although

the vestiges of Jim Crow have long since dis-

appeared in the contemporary United States,

there remain features of American society that

may contribute to persistent forms of struc-

tural discrimination (see Massey 2007, Feagin

2006).

One example is the provision of public ed-

ucation in the United States. According to

Orﬁeld & Lee (2005, p. 18), more than 60% of

black and Latino students attend high poverty

schools, compared with 30% of Asians and 18%

of whites. In addition to funding disparities

across these schools, based on local property

taxes, the broader resources of schools in poor

neighborhoods are substantially limited: Teach-

ers in poor and minority schools are likely to

have less experience, shorter tenure, and emer-

gency credentials rather than ofﬁcial teaching

certiﬁcations (Orﬁeld & Lee 2005). At the same

time, schools in high poverty neighborhoods

are faced with a greater incidence of social

problems, including teen pregnancy, gang in-

volvement, and unstable households (Massey &

Denton 1993). With fewer resources, these

schools are expected to manage a wider array

of student needs. The resulting lower quality of

education common in poor and minority school

districts places these students at a disadvantage

in competing for future opportunities (Massey

2006).

A second relevant example comes from the

domain of criminal justice policy. Although ev-

idence of racial discrimination at selective de-

cision points in the criminal justice system is

weak (Sampson & Lauritsen 1997), the un-

precedented growth of the criminal justice sys-

tem over the past 30 years has had a vastly

198 Pager

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disproportionate effect on African Americans.

Currently, nearly one out of three young black

men will spend time in prison during his life-

time, a ﬁgure that rises to nearly 60% among

young black high school dropouts (Bonczar

& Beck 1997, Pettit & Western 2004). Given

the wide array of outcomes negatively affected

by incarceration—including family formation,

housing, employment, political participation,

and health—decisions about crime policy, even

when race-neutral in content, represent a criti-

cal contemporary source of racial disadvantage

(Pattillo et al. 2003, Pager 2007b, Manza &

Uggen 2006).

These examples point to contexts in which

ostensibly race-neutral policies can structure

and reinforce existing social inequalities. Ac-

cording to Omi & Winant (1994), “through

policies which are explicitly or implicitly racial,

state institutions organize and enforce the racial

politics of everyday life. For example, they en-

force racial (non)discrimination policies, which

they administer, arbitrate, and encode in law.

They organize racial identities by means of

education, family law, and the procedures for

punishment, treatment, and surveillance of the

criminal, deviant and ill” (p. 83). Even without

any willful intent, policies can play an active role

in designating the beneﬁciaries and victims of

a particular system of resource allocation, with

important implications for enduring racial in-

equalities.

Accumulation of disadvantage. This third

category of structural discrimination draws our

attention to how the effects of discrimination

in one domain or at one point in time may have

consequences for a broader range of outcomes.

Through spillover effects across domains, pro-

cesses of cumulative (dis)advantage across the

life course, and feedback effects, the effects of

The case of drug policy and enforcement is one area for

which evidence of direct racial discrimination is stronger (see

Beckett et al. 2005, Tonry 1995).

discrimination can intensify and, in some cases,

become self-sustaining.

Although traditional measures of discrim-

ination focus on individual decision points

(e.g., the decision to hire, to rent, to offer a

loan), the effects of these decisions may ex-

tend into other relevant domains. Discrimina-

tion in credit markets, for example, contributes

to higher rates of loan default, with negative im-

plications for minority entrepreneurship, home

ownership, and wealth accumulation (Oliver

& Shapiro 1997). Discrimination in housing

markets contributes to residential segregation,

which is associated with concentrated disadvan-

tage (Massey & Denton 1993), poor health out-

comes (Williams 2004), and limited educational

and employment opportunities (Massey &

Fischer 2006, Fernandez & Su 2004). Single

point estimates of discrimination within a par-

ticular domain may substantially underestimate

the cumulative effects of discrimination over

time and the ways in which discrimination in

one domain can trigger disadvantage in many

others.

In addition to linkages across domains, the

effects of discrimination may likewise span for-

ward in time, with the cumulative impact of dis-

crimination magnifying initial effects. Blau &

Ferber (1987), for example, point to how the

channeling of men and women into different

job types at career entry “will virtually ensure

sex differences in productivity, promotion op-

portunities, and pay” (p. 51). Small differences

in starting points can have large effects over

the life course (and across generations), even in

the absence of continuing discrimination [for

a rich discussion of cumulative (dis)advantage,

see DiPrete & Eirich (2006)].

Finally, anticipated or experienced discrim-

ination can lead to adaptations that intensify

initial effects. Research points to diminished

effort or valuation of schooling (Ogbu 1991),

lower investments in skill-building (Farmer &

Terrell 1996), and reduced labor force partic-

ipation (Castillo 1998) as possible responses

to perceived discrimination against oneself or

members of one’s group. These adaptations can

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easily be coded as choices rather than con-

straints, as characteristics to be controlled for

in estimates of discrimination rather than in-

cluded as one part of that estimate. And yet,

for an understanding of the full range of effects

associated with discrimination, these indirect

pathways and self-fulﬁlling prophesies should

likewise be examined (see Loury 2002, pp. 26–

33).

A focus on structural and institutional

sources of discrimination encourages us to con-

sider how opportunities may be allocated on

the basis of race in the absence of direct prej-

udice or willful bias. It is difﬁcult to capture

the structural and cumulative consequences of

discrimination using traditional research de-

signs; advances in this area will require creative

new approaches (see National Research Coun-

cil 2004, chapter 11). Nevertheless, for an accu-

rate accounting of the impact of discrimination,

we must recognize how historical practices and

contemporary policies may contribute to ongo-

ing and cumulative forms of racial discrimina-

tion.

CONCLUSION

Discrimination is not the only cause of racial

disparities in the United States. Indeed, persis-

tent inequality between racial and ethnic groups

is the product of complex and multifaceted

inﬂuences. Nevertheless, the weight of exist-

ing evidence suggests that discrimination does

continue to affect the allocation of contempo-

rary opportunities; and, further, given the of-

ten covert, indirect, and cumulative nature of

these effects, our current estimates may in fact

understate the degree to which discrimination

contributes to the poor social and economic

outcomes of minority groups. Although great

progress has been made since the early 1960s,

the problem of racial discrimination remains an

important factor in shaping contemporary pat-

terns of social and economic inequality.

DISCLOSURE STATEMENT

The authors are not aware of any biases that might be perceived as affecting the objectivity of this

review.

ACKNOWLEDGMENTS

We thank Barbara Reskin, Douglas Massey, Frank Dobbin, and Lincoln Quillian for their generous

comments and suggestions. Support for this research came from grants from NSF (SES-0547810)

and NIH (K01-HD053694). The second author also received support from an NSF Graduate

Research Fellowship.

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Annual Review

of Sociology

Volume 34, 2008

Contents

Prefatory Chapters

Reproductive Biology, Technology, and Gender Inequality:

An Autobiographical Essay

Joan N. Huber pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp1

From Mead to a Structural Symbolic Interactionism and Beyond

Sheldon Stryker pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp15

Theory and Methods

Methodological Memes and Mores: Toward a Sociology

of Social Research

Erin Leahey pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp33

Social Processes

After Secularization?

Philip S. Gorski and Ate¸s Altınordu pppppppppppppppppppppppppppppppppppppppppppppppppppppppppp55

Institutions and Culture

Religion and Science: Beyond the Epistemological Conﬂict Narrative

John H. Evans and Michael S. Evans pppppppppppppppppppppppppppppppppppppppppppppppppppppppp87

Black/White Differences in School Performance: The Oppositional

Culture Explanation

Douglas B. Downey pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp107

Formal Organizations

Sieve, Incubator, Temple, Hub: Empirical and Theoretical Advances

in the Sociology of Higher Education

Mitchell L. Stevens, Elizabeth A. Armstrong, and Richard Arum ppppppppppppppppppppppp127

Political and Economic Sociology

Citizenship and Immigration: Multiculturalism, Assimilation,

and Challenges to the Nation-State

Irene Bloemraad, Anna Korteweg, and G¨ok¸ce Yurdakul pppppppppppppppppppppppppppppppppp153

Annu. Rev. Sociol. 2008.34:181-209. Downloaded from arjournals.annualreviews.org

by Princeton University Library on 08/27/08. For personal use only.

AR348-FM ARI 10 June 2008 11:22

Differentiation and Stratiﬁcation

The Sociology of Discrimination: Racial Discrimination

in Employment, Housing, Credit, and Consumer Markets

Devah Pager and Hana Shepherd pppppppppppppppppppppppppppppppppppppppppppppppppppppppppp181

The Second Generation in Western Europe:

Education, Unemployment, and Occupational Attainment

Anthony F. Heath, Catherine Rothon, and Elina Kilpi pppppppppppppppppppppppppppppppppppp211

Broken Down by Race and Gender? Sociological Explanations

of New Sources of Earnings Inequality

Kevin T. Leicht pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp237

Family Structure and the Reproduction of Inequalities

Sara McLanahan and Christine Percheski ppppppppppppppppppppppppppppppppppppppppppppppppp257

Unconscious Racism: A Concept in Pursuit of a Measure

Hart Blanton and James Jaccard ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp277

Individual and Society

Horizontal Stratiﬁcation in Postsecondary Education:

Forms, Explanations, and Implications

Theodore P. Gerber and Sin Yi Cheung pppppppppppppppppppppppppppppppppppppppppppppppppppp299

Gender Inequalities in Education

Claudia Buchmann, Thomas A. DiPrete, and Anne McDaniel pppppppppppppppppppppppppp319

Access to Civil Justice and Race, Class, and Gender Inequality

Rebecca L. Sandefur ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp339

How the Outside Gets In: Modeling Conversational Permeation

David R. Gibson ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp359

Testing and Social Stratiﬁcation in American Education

Eric Grodsky, John Robert Warren, and Erika Felts pppppppppppppppppppppppppppppppppppppp385

Policy

Social Networks and Health

Kirsten P. Smith and Nicholas A. Christakis ppppppppppppppppppppppppppppppppppppppppppppppp405

Sociology and World Regions

Gender in African Population Research: The Fertility/Reproductive

Health Example

F. Nii-Amoo Dodoo and Ashley E. Frost ppppppppppppppppppppppppppppppppppppppppppppppppppp431

Regional Institutions and Social Development in Southern Africa

Matthew McKeever ppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp453

vi Contents

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by Princeton University Library on 08/27/08. For personal use only.

AR348-FM ARI 10 June 2008 11:22

Conditional Cash Transfers as Social Policy in Latin America:

An Assessment of their Contributions and Limitations [Translation]

Enrique Valencia Lomel´ı pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp475

Las Transferencias Monetarias Condicionadas como Política Social en

América Latina. Un Balance: Aportes, Límites y Debates

[Original, available online at http://www.annualreviews.org/

go/EValenciaLomeli]

Enrique Valencia Lomelí pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp499

Indexes

Cumulative Index of Contributing Authors, Volumes 25–34 ppppppppppppppppppppppppppp525

Cumulative Index of Chapter Titles, Volumes 25–34 pppppppppppppppppppppppppppppppppppp529

Errata

An online log of corrections to Annual Review of Sociology articles may be found at

http://soc.annualreviews.org/errata.shtml

Contents vii

Annu. Rev. Sociol. 2008.34:181-209. Downloaded from arjournals.annualreviews.org

by Princeton University Library on 08/27/08. For personal use only.