The Supply Side of Discrimination: Evidence from the Labor Supply of Boston Taxi Drivers
In the United States, an important and ongoing concern is determining whether legally protected classes experience discrimination based on their age, ethnicity, gender, or race. In terms of the labor market, demand-side discrimination has been widely studied for how it may affect market outcomes such as employment or wages. But labor market discrimination can also take place on the supply side, motivated either by taste-based discrimination (personal prejudice) or by statistical discrimination due to workers having incomplete information about the potential demand for their services. Previous economic research has used the taxi industry to study labor supply behavior, as cab drivers have considerable flexibility and choice about the hours they work and the areas they serve. This paper is a comprehensive study of supply-side discrimination in the labor market for taxi service in Boston. The author uses data on millions of trips made by Boston taxi drivers in 2010–2015 to examine whether supply-side discrimination exists based on the demographic characteristics of the residents living in Boston neighborhoods.