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Employer Attitudes, the Marginal Employer and the Ethnic Wage Gap

Author

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  • Carlsson, Magnus

    () (Linnaeus University)

  • Rooth, Dan-Olof

    () (Stockholm University)

Abstract

Ethnic minorities have lower wages compared to the ethnic majority in most EU-countries. However, to what extent these wage gaps are the result of prejudice toward ethnic minority workers is virtually unknown. This study sets out to examine what role prejudice play in the creation of the ethnic wage gap in one of Europe's most egalitarian countries, Sweden. The analysis takes into account the important distinction between average employer attitudes and the attitude of the marginal employer. Our results confirm that the attitudes of the marginal employer – but not those of the average employer – are important for the ethnic wage gap. This relationship becomes even stronger when potential measurement error and other forms of endogeneity are accounted for by controlling for a rich set of variables and implementing instrumental variable techniques.

Suggested Citation

  • Carlsson, Magnus & Rooth, Dan-Olof, 2011. "Employer Attitudes, the Marginal Employer and the Ethnic Wage Gap," IZA Discussion Papers 6227, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6227
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    References listed on IDEAS

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    1. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, vol. 112(483), pages 480-518, November.
    2. Carlsson, Magnus & Rooth, Dan-Olof, 2007. "Evidence of ethnic discrimination in the Swedish labor market using experimental data," Labour Economics, Elsevier, vol. 14(4), pages 716-729, August.
    3. Rooth, Dan-Olof, 2010. "Automatic associations and discrimination in hiring: Real world evidence," Labour Economics, Elsevier, vol. 17(3), pages 523-534, June.
    4. Waisman, Gisela & Larsen, Birthe, 2007. "Do attitudes towards immigrants matter?," Working Papers 11-2007, Copenhagen Business School, Department of Economics.
    5. Dustmann, Christian & Preston, Ian, 2001. "Attitudes to Ethic Minorities, Ethnic Context and Location Decisions," Economic Journal, Royal Economic Society, vol. 111(470), pages 353-373, April.
    6. Yann Algan & Christian Dustmann & Albrecht Glitz & Alan Manning, 2010. "The Economic Situation of First and Second-Generation Immigrants in France, Germany and the United Kingdom," Economic Journal, Royal Economic Society, vol. 120(542), pages 4-30, February.
    7. Alicia Adsera & Barry Chiswick, 2007. "Are there gender and country of origin differences in immigrant labor market outcomes across European destinations?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(3), pages 495-526, July.
    8. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
    9. Olof Åslund & Dan-Olof Rooth, 2005. "Shifts in attitudes and labor market discrimination: Swedish experiences after 9-11," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 603-629, November.
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    Cited by:

    1. Heili Hein & Aaro Hazak & Kadri Männasoo, 2017. "Who has a better chance of getting higher salaries among creative R&D employees?," TUT Economic Research Series 39, Department of Finance and Economics, Tallinn University of Technology.
    2. Banerjee, Ritwik & Datta Gupta, Nabanita, 2014. "Awareness Programs and Change in Taste-based Caste Prejudice," IZA Discussion Papers 8446, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    ethnic wage gap; attitudes; prejudice; marginal employer;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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