Discrimination, as defined in economics, occurs when two otherwise identical individuals or groups are treated differently based solely on a group attribute. In economic terms, discrimination leads to real losses in productivity and efficiency. When talent is overlooked, firms lose potential profit, and society wastes valuable human capital. In our latest episode of Talking Economics, Vojtěch Bartoš, Associate Professor at the University of Milan and CERGE-EI alumnus, explains how behavioral economics helps uncover the mechanisms behind bias — and how evidence-based tools can help reduce it.
Why Does Discrimination Persist?
If discrimination is costly, why does it still exist? According to the research, there are two main explanations.
Historical roots. In early human societies, visible traits such as tattoos or skin color served as quick signals for trust and safety — a way to distinguish “us” from “them.” While this may have once been adaptive, in today’s interconnected world, it has become an outdated evolutionary reflex that still shapes behavior.
Information and bias. In modern contexts, discrimination often arises not from open hostility, but from beliefs and stereotypes. People rely on group-based assumptions — a phenomenon known as statistical discrimination. Another type, taste-based discrimination, stems from pure prejudice or emotional bias toward a group.
Behavioral Economics and New Insights
Behavioral economics helps explain how people form and update beliefs. It goes beyond simple cost–benefit logic by examining how social preferences and biases influence decision-making. People often interpret information in ways that confirm existing stereotypes — for instance, discounting positive information about members of a disliked group.
To study these mechanisms, economists use methods such as correspondence studies, where identical job applications with different names are sent to employers, and behavioral experiments like dictator games, which reveal personal preferences toward others.
Attention Discrimination: A Hidden Mechanism
In research conducted with Michal Bauer, Julie Chytilová, and Filip Matějka, attention discrimination was identified as another subtle form of bias. Using job and housing applications embedded with tracking tools, researchers measured whether recipients opened and read the information. They found that attention itself can be selective: minority candidates’ applications were often ignored in competitive job markets, while in less competitive housing markets, they were examined more carefully.
This shows that discrimination can persist even without overt prejudice — it can arise from how people allocate attention and process information under time and cognitive constraints.
Beyond Race and Across Borders
Discrimination extends beyond race or ethnicity. It can target any attribute that individuals do not choose, such as gender, age, sexual orientation, or religion. While the targets differ, the underlying mechanisms remain similar.
Explicit discrimination is still common in some developing contexts, while in others it has become more subtle. Social norms and their enforcement play a crucial role. Research shows that people’s willingness to express discriminatory views publicly often depends not on changing beliefs, but on what is seen as socially acceptable.
Breaking Bias: Where Solutions Begin
Vojtěch explores how discrimination can be reduced by combining insights from economics and psychology. There are, in fact, some promising directions.
For statistical discrimination, the solution lies in better information. With new technologies — from blockchain to AI-based profiling — individuals can present more credible and transparent information about themselves, helping reduce reliance on group-based assumptions.
When it comes to attention discrimination, techniques such as temporary anonymization can help — for example, removing names or identifying details from CVs so that recruiters evaluate candidates more equitably, even if this can backfire in some cases.
Addressing taste-based discrimination requires psychological and behavioral approaches. One promising idea comes from the theory of social distance: our attitudes shift when we start seeing members of minority groups as part of our own community — classmates, colleagues, or teammates. Structured, cooperative contact between groups, under equal conditions, has been shown to reduce prejudice.
However, scaling such interventions remains a challenge. They are often costly and may work better for some types of discrimination than others.
A Closer Look at Age-Based Discrimination
Vojtěch, together with Michal Bauer, Julie Chytilová, and Jana Cahlíková, is also exploring age-based discrimination, a phenomenon they call Youngism. Their studies show that older adults often exhibit strong negative biases toward younger generations, while younger people do not display the same animosity toward seniors.
Survey data confirm that stereotypes about young adults — such as being lazy or unreliable — are widespread. At the same time, older workers also face negative perceptions, particularly concerning productivity. Both the youngest and oldest workers are disadvantaged compared to those in middle age, but the bias in beliefs is much stronger and more pervasive for the young. Moreover, when it comes to preferences, the disadvantage applies exclusively to them. We refer to this as the double penalty — in both beliefs and preferences — faced by young people.
In experiments, simply providing factual information helped reduce these biases. For example, when participants learned that young adults are, in fact, more likely to experience mental health challenges than older adults — contrary to common beliefs — their discriminatory behavior toward younger people decreased.
These information-based interventions may be among the most cost-effective tools available: small corrections in perception can already make a measurable difference.
Looking Forward
While discrimination remains deeply rooted in both history and human psychology, understanding its mechanisms — and testing evidence-based interventions — offers hope. As this research shows, combining insights from behavioral economics and psychology may help societies move closer to breaking bias and reducing the real economic and social costs of discrimination.
Listen to the Full Episode
Catch the full conversation on Spotify, Apple Podcasts, or YouTube to explore the details.
Vojtěch Bartoš is an Associate Professor at the Department of Economics, Management, and Quantitative Methods at the University of Milan. A CERGE-EI PhD alumnus, he previously held academic positions in Munich and Milan. His research lies at the intersection of behavioral, development, and experimental economics, exploring how poverty, inequality, and discrimination shape individual decision-making. Vojtěch has conducted extensive field and lab experiments across Europe, Asia, and Africa, examining how economic and institutional contexts influence human behavior.
