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Measuring Segregation on Small Units: A Partial Identification Analysis

Measuring Segregation on Small Units: A Partial Identification Analysis

291/2016 Xavier D’Haultfoeuille and Roland Rathelot
culture and development, working papers
Quantitative Economics
http://dx.doi.org/10.3982/QE501

291/2016 Xavier D’Haultfoeuille and Roland Rathelot

We consider the issue of measuring segregation in a population of small units, considering establishments in our application. Each establishment may have a different probability to hire an individual from the minority group. We define segregation indices as inequality indices on these unobserved, random probabilities. Because these probabilities are measured with error by proportions, standard estimators are inconsistent. We model this problem as a nonparametric binomial mixture. Under this testable assumption and conditions satisfied by standard segregation indices, such indices are partially identified and sharp bounds can be easily obtained by an optimization over a low dimensional space. We also develop bootstrap confidence intervals and a test of the binomial mixture model. Finally, we apply our method to measure the segregation of foreigners in small French firms.

Culture and Development

Quantitative Economics

http://dx.doi.org/10.3982/QE501