Discrimination of Minority Welfare Claimants in the Real World: The Effect of Implicit Prejudice

Exploiting rare access to doctors' real-world judgments of incapacity benefits applications to an Israeli governmental program (2015-17), we examine the prevalence and underlying mechanisms of discrimination against Muslims versus Jews. To mitigate confounding explanations for unequal treatment, we restrict the analysis to claimants whose applications passed a strict medical-disability threshold so that their medical condition was undisputed. Theoretically, we offer a comprehensive theoretical framework for possible micro-mechanisms underlying bureaucratic discrimination of minorities, the decision-environment conditions that instigate them, and observational implications for their decoding. Findings indicate that despite organizational commitment to equality Jewish doctors were more likely to reject applications by Muslims and to recommend partial compensation for Jews. We find no differences with regard to full compensation. Further, we empirically illustrate how our proposed theoretical framework can be employed to analyze which micro-mechanism is most likely to underlie discrimination and to empirically decipher among alternative explanations, demonstrating that bureaucratic discrimination, in this case, is best explained by implicit prejudice triggered under conditions of complexity and ambiguity that undermined doctors' systematic processing of information.