The Muslim Employment Gap, Human Capital, and Ethno-Religious Penalties: Evidence from Switzerland

In Europe, Muslims are more likely to be unemployed than non-Muslims. Many studies try to explain this employment gap by human capital and contextual factors on the one hand, and by ethno-religious penalties (discrimination due to religious affiliation, religiosity, or migration factors) on the other. In these studies, it is normally assumed that human capital mediates the effect of Muslim affiliation, and that controlling for human capital will therefore reduce the odds for Muslims of being unemployed. We replicate the well-known study by Connor and Koenig (2015) along these lines, using the most recent and representative Swiss data from 2014 (N = 16,487). Our key result is that Muslim affiliation does not mediate, but actually moderates, the effect of human capital on unemployment. We find a powerful interaction in that Muslims both with a very low and a very high level of education are disproportionally often unemployed. This is important because it means that raising the human capital of Muslims will not automatically lessen, but may instead actually widen, the employment gap. We discuss possible theoretical mechanisms that might explain this finding.