We provide both theoretical and empirical analyses of the nature and the impact of racial discrimination in the labor and legal markets. The first chapter develops a dynamic model of statistical discrimination in which firms diversify their workforce by lowering the hiring standard for blacks. Despite such a diversity goal at hiring, task assignment and promotion decisions are not constrained by this policy. In this setting, the model predicts that although blacks are more likely to be hired compared to observably similar whites, they are more likely to be placed in worse tasks and less likely to be promoted conditional on the same set of observables. However, conditional on task assignments, blacks and whites face similar promotion rates. I test the models predictions using new data from the After the JD study and find support for all my predictions. In the second chapter, we review theories of racial discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing model explains the unemployment rate differential. Models of statistical discrimination can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment. We suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy. In the third chapter, we ask whether the process of jury selection can lead to juries that are incommensurate with the constitutional ideal of an "impartial jury" along demographic and socioeconomic dimensions. We analyze these questions for non-capital felony jury trials held in four major U.S. state trial courts during 2000 to 2001. We find that the prosecution and the defense have opposing preferences for juries across race, sex, and income levels. Although these factors are correlated with pre-deliberation biases of juries, they have no predictive power in explaining individual voting patterns. However, we find that the average levels of income and proportion of blacks in the jury are significantly correlated with verdicts as predicted by attorney preferences.