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The strength of weak enforcement: The impact of discrimination charges, legal environments, and organizational conditions on workforce segregation (Hirsh 2009)

Citation

Hirsh, C. (2009). The strength of weak enforcement: The impact of discrimination charges, legal environments, and organizational conditions on workforce segregation. American Sociological Review, 74, 245-271.

Highlights

    • The study’s objective was to assess two approaches to mitigating employment discrimination: direct Equal Employment Opportunity Commission (EEOC) enforcement and indirect, industry-level EEOC enforcement.
    • The author applied a fixed-effects regression analysis to a national random sample of private U.S. employment establishments required to report race and gender data to the EEOC from 1990 to 2002.
    • The study found that EEOC settlements mandating policy changes or monetary payouts within an industry were associated with statistically significant decreases in sex segregation within establishments in the industry, but had limited effects on race segregation.
    • The quality of causal evidence presented in this report is low because the authors did not establish that firms subject to different levels of enforcement activities were similar before those activities. This means we are not confident that the estimated effects are attributable to either direct or indirect EEOC enforcement; other factors are likely to have contributed.

Intervention Examined

Equal Employment Opportunity Commission Enforcement

Features of the Intervention

Under Title VII of the Civil Rights Act of 1964, employers are forbidden from discriminating against their employees on the basis of race, sex, color, religion, or national origin. The law prohibits discrimination in terms, compensation, working conditions, and other aspects of employment. The Civil Rights Act of 1964 created the EEOC to enforce Title VII. Employees who believed they had experienced employment discrimination could file claims against their employers through this commission, which was empowered to investigate the allegations and arbitrate settlements. If investigators substantiated claims, the EEOC could have required employers to pay monetary benefits to complainants or to improve workplace policies or conditions.

Features of the Study

The author used fixed-effects regressions to examine a longitudinal sample of 2,166 establishments that filed EEO-1 Employer Information Reports from 1990 to 2002. Private establishments with at least 100 employees and federal contractors with at least 50 employees were required to submit these reports annually to the EEOC and the Department of Labor's Office of Federal Contract Compliance Programs. The outcome variable was a dissimilarity index that measured the extent to which two given groups of workers were distributed differently across occupational categories within an establishment. The analysis assessed the effects of enforcement activities on this measure of occupational segregation.

To evaluate the effects of direct EEOC enforcement, the author included variables that measured the number of race or sex discrimination charges against each establishment in each year, the dollar amount each establishment paid in each year to settle discrimination suits, and binary variables indicating whether each establishment received a mandate to change its employment policies or was involved in a class-action claim in each year. Analogous variables for each industry in each year captured the effect of being in an industry with greater EEOC enforcement. The models included fixed effects for each establishment and industry and controlled for organizational characteristics that could vary over time, such as size and minority representation in management, as well as characteristics of the legal environment, such as whether the establishment was a federal contractor or located in a progressive judicial circuit. In some specifications, effects of enforcement variables were allowed to differ by establishment characteristics.

Findings

    • The study found that every additional settlement mandating a policy change within an industry and every additional dollar of monetary settlements within an industry were associated with a statistically significant decrease in sex segregation within establishments in the industry, but had limited effects on race segregation.
    • Direct discrimination charges and sanctions had no statistically significant effect on race or gender segregation.
    • Larger monetary settlements reduced sex segregation significantly more among federal contractors than among noncontractors and more among smaller than larger establishments.

Considerations for Interpreting the Findings

This study sought to quantify the effect of enforcement activities on occupational segregation by associating changes in segregation with EEOC claims and settlements. Employment establishments and industries with a predisposition to discriminate might face more charges and enforcement activities, suggesting that establishments and industries that experience fewer charges are not inherently comparable to establishments or industries that face more. The inclusion of establishment-level fixed effects do not completely address this problem because the author does not discuss any evidence that a predisposition to discriminate is a fixed characteristic (for instance, by comparing trends between establishments that ultimately face low and high levels of enforcement). Although EEOC enforcement activities, direct or indirect, contributed to the estimated change in occupational segregation, an establishment’s predisposition to discriminate may have contributed as well; therefore, the study’s estimates do not represent the effect of enforcement alone.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the author did not establish that firms subject to different levels of enforcement activities were similar before those activities. This means we are not confident that the estimated effects are attributable to either direct or indirect EEOC enforcement; other factors are likely to have contributed.

Reviewed by CLEAR

November 2015

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