DRI Working Paper No. 72
By Shing-Yi Wang
Statistical Discrimination, Productivity and the Height of Immigrants
Building on the economic research that demonstrates a positive relationship between height and worker ability, this paper considers whether employers use height as a tool for statistical discrimination. The analysis focuses on immigrants and native-born individuals because employers are likely to have less reliable signals of productivity for an immigrant than a native-born individual. Using multiple data sets, the paper presents a robust empirical finding that the wage gains associated with height are almost twice as large for immigrants than for native-born individuals. This result is consistent with two hypotheses. First, in the relative absence of other sources of information about immigrants, employers place more weight on height for immigrants than for native-born individuals. Second, height is more correlated with productivity for immigrants than for native-born individuals. The empirical results provide strong support for the hypothesis that the productivity gap between tall and short immigrants is greater than the productivity gap between tall and short native-born workers. The hypothesis of statistical discrimination based on height is rejected.