Research Economics and Management

With our research we focus on the themes of labor markets, aging, sustainability, innovation, market governance, banking, financial markets, entrepreneurship, marketing, and consumer behavior.

Recent study: Ethnic discrimination is also a matter of taste

A recent study by Elena Cettolin and Sigrid Suetens (TiSEM) shows that ethnic discrimination is not necessarily due to stereotyping but can also be a matter of ‘taste’.

In the Netherlands and other European countries ‘non-western’ immigrants are generally worse off than native Europeans. They are more frequently unemployed, and if they have a job they earn less or are rather overqualified. Differences in education, language problems, etc. are factors that potentially underlie this gap. And as field experiments have shown, discrimination is a factor as well. For example, applicants with a ‘non-western’ name are less frequently invited for job interviews than applicants with a native name, even if their cv is otherwise the same.

Field experiments do not show, however, whether the observed discrimination is the consequence of stereotyping or of preferences (‘tastes’). Stereotyping may occur in a context of ‘behavioral risk’: if the decision-maker has little information about how a person will act, he may form expectations by relying on general information about the group to which this person belongs. To illustrate, an employer who sees many immigrants being unemployed may believe that immigrants are less productive than workers from the native majority, and may therefore be reluctant to hire an immigrant. Discrimination driven by tastes stems from a dislike of ‘the other’ because it persists even if there is no behavioral risk. It may lead to economic inefficiencies, for example, by distorting the allocation of talent.

It goes without saying that it is difficult to identify the ‘source’ of discrimination. However, for policy makers who wish to deal with discrimination, having knowledge about its source is important: changing tastes most likely requires other measures than changing stereotypes. A recent study by Elena Cettolin and Sigrid Suetens designed to isolate taste-based discrimination shows that it indeed exists.

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