Economic and Statistical Analysis of Discrimination in Hiring

Legal and administrative determinations of employers' compliance with "equal employment opportunity" (EEO) requirements often hinge on the issue of the availability of protected class members to employers. That is,courts and affirmative action review agencies compare the hire rates of protected class members (the ratio of the number of protected class members hired to the number who applied or who were potentially available) to the comparable ratio for other applicants, in assessing whether an employer's hiring policies meet the standards required of them by equal opportunity regulations. The purpose of this paper is to review what economic theory suggests affects availability and to analyze the extent to which these factors are considered in administrative or judicial decisions concerning hiring policies. In our analyses, we point out areas where there seem tobe inconsistencies or unresolved issues.