(When) Does Appearance Matter? Evidence from a Randomized Controlled Trial

Prithwiraj  Choudhury; Tarun   Khanna; Christos A. Makridis; Subhradip  Sarker

Working Paper | HBS Working Paper Series | 2020

(When) Does Appearance Matter? Evidence from a Randomized Controlled Trial

by Prithwiraj Choudhury, Tarun Khanna, Christos A. Makridis and Subhradip Sarker

Abstract

While there is evidence about labor market discrimination based on race, religion, and gender, we know little about whether physical appearance leads to discrimination in labor market outcomes. We deploy a randomized experiment on 1,000 respondents in India between April and May 2020 to investigate how “looks” affect labor market outcomes. Using machine learning and computer face rendering techniques, we simulate North, South, and Northeastern Indian faces and randomize two waves of treatments where we attach faces with otherwise identical CVs. However, the second wave also contains a vignette where we provide respondents with information about the incidence of discrimination. We focus on Northeastern Indian faces that resemble those in China to focus on the potential for discrimination that has historically been present in anecdotal accounts. While we do not find evidence of discrimination against Northeastern faces in the first wave, we do so in the second among those who do not see the vignette. We provide suggestive evidence that these results are consistent with the presence of homophily under limited attention.

Keywords: Behavioral economics; coronavirus; discrimination; homophily; labor market mobility; limited attention; resumes; Personal Characteristics; Prejudice and Bias;

Language: English

Format: Print

50 pages

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Citation:

Choudhury, Prithwiraj, Tarun Khanna, Christos A. Makridis, and Subhradip Sarker. "(When) Does Appearance Matter? Evidence from a Randomized Controlled Trial." Harvard Business School Working Paper, No. 21-038, September 2020.

We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants’ receiving countries. We find that countries are 25 to 60 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample, this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries, which translates into higher patenting in the receiving countries. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations.

On June 22, 2020, President Trump issued an Executive Order (EO) that suspended new work visas, barring nearly 200,000 foreign workers and their dependents from entering the United States and preventing American companies from hiring skilled immigrants using H-1B or L1 visas. Exploiting this shock, and using event study methodology analyzing the cumulative average abnormal returns (CAARs) of Fortune 500 companies following this order, we find that the EO statistically and economically significantly caused negative CAARs of up to 0.45%, the equivalent of over 100 billion of US dollars of losses, based on the firms’ valuation before the event. Our results are particularly pronounced for firms that had maintained or increased their reliance on skilled immigrant workers over the prior years.

Working Paper | HBS Working Paper Series | 2020

The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time

Jasmina Chauvin, Prithwiraj Choudhury and Tommy Fan Pang

Cross-border communication costs have plummeted and enabled the global distribution of work, but frictions attributable to distance persist. We estimate the causal effects of temporal distance stemming from time zone differences on intra-firm communication. We argue that temporal distance reduces synchronous and impromptu communication from first-best levels, and presents an especially costly friction for knowledge-intensive work. Exploiting detailed data from a large multinational firm and discrete changes in temporal distance due to shifts to and from Daylight Savings Time, we show that office pairs that lose one or two shared business hours due to DST reduce their total communication volumes by 9.2 percent on average from baseline levels, an effect driven by decreases in scheduled calls and meetings (-10.7 percent) and in instant-message chat volumes (-8.7 percent). When office pairs gain one or two shared business hours, volumes of unscheduled calls increase (+17.6 percent). Volumes of asynchronous communication (e-mail), in contrast, show no significant responses to changes in temporal distance. Examining heterogeneity by employee function, we find evidence that the shadow value of additional shared time is higher for knowledge-intensive (R&D and IT) employees than for production employees. Finally, using communication time stamps, we show that greater temporal distance leads to more work being shifted into leisure time; however, such adjustments do not fully offset lost communication during business hours. We discuss the implications of our findings for distributed work and for firms’ spatial organization.

Keywords: communication patterns; time zones; geographic frictions; knowledge workers; multinational companies;

Citation:

Chauvin, Jasmina, Prithwiraj Choudhury, and Tommy Fan Pang. "The Effects of Temporal Distance on Intra-Firm Communication: Evidence from Daylight Savings Time." Harvard Business School Working Paper, No. 21-052, September 2020. View Details

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