# **1 Introduction**

It is notoriously difficult to study labor market discrimination. In recent years, a large literature has emerged in which researchers send fictitious resumes to estimate discrimination along many characteristics including race, gender, age, and sexual orientation (for recent reviews see Bertrand and Duflo (2016); Neumark (2016); Rich (2014)). While these correspondence studies have important advantages over observational and audit studies, they can only be used for select types of vacancies (Pager (2007)) and have several methodological limitations (Heckman (1998)).

In particular, audit studies have been applied almost exclusively in the formal sector of developed countries.<sup>1</sup> Yet, a minority of the global labor force works in these markets and these are precisely the settings in which employees enjoy the most comprehensive legal protection from discrimination. This study provides evidence for a very different setting: the situation of immigrants working in the informal sector in South Africa. Obtaining evidence on discrimination through audit studies is difficult in these markets as employers typically neither advertise job vacancies nor use formal hiring processes that include systematic screening of job seekers.<sup>2</sup> Pager (2007, p.111) therefore concludes that in this context “ _any study would require in-person application procedure_ ”. I will argue that the observational data collected in this study allows me to not only apply many of the methodological advantages of audit studies, but also address some of the key methodological limitations.

I collect a unique data set of 5,500 job seeker advertisements in the domestic work, nanny and general work sector collected from South Africa’s largest classified ad website, which caters mainly to the informal sector<sup>3</sup> . When employers search for workers in a particular sector and region they are presented with a list of truncated summaries of job seeker profiles. Based on the information visible at the search stage employers decide whether to click on the full profile, which provides additional information and contact details of the job seeker. Importantly, the profile page reports how many people previously clicked on the profile which serves as a measure of employer demand. This setting mimics the ideal experiment in that, similar to correspondence studies, researchers observe exactly

> 1Bertrand and Duflo (2016) note, for example, that there is not a single audit study conducted in Africa.

> 2Moreover, ethical concerns have been raised about conducting audit studies that involve sending thousands of fictitious CVs in labor markets with mass unemployment as this would further impede the hiring process.

> 3According to the ILO, one of the defining characteristics of the informal sector is that “ _Labour relations are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees._ ” According to the data I collect, 80% of job seekers employed through the website are agreed on the basis of a verbal agreement rather than a written contract. It is predominantely used by private households looking to hire: among job seekers who receive a response to their advertisement, 95% report being contacted by a private household.

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