Ethnic
Discrimination
in
Germany's
Labour
Market:
A
Field
Experiment
Leo
Kaas
and Christian
Manger
University of Konstanz
Abstract.
This
paper
studies ethnic discrimination in
Germany's
labour
market with a
correspondence
test.
We
send
two
similar
applications
to
each
of
528 advertisements
for
student
internships,
one
with a
Turkish
-sounding and
one
with a German-sounding name.
A
German
name
raises
the
average
probability
of
a
callback
by
about 14%. Differential
treatment
is
particularly
strong
and significant in smaller
firms
at
which
the applicant with
the
German
name
receives
24%
more
callbacks.
Discrimination
disappears
when
we
restrict
oLlr
sample
to
applications
including
reference
letters
which
contain
favourable
information about
the
candidate's
personality.
We
interpret
this
finding
as
evidence
for
statistical discrimination.
JEL
classification:
C93, J71.
Keywords:
Ethnic discrimination; hiring discrimination; correspondence test.
1. INTRODUCTION
Discrimination' against individuals
with
respect
to
ethnicity, gender
or
religion has
a wide impact
on
labour market outcomes, including job opportunities, promo-
tions
and
earnings. The extent
to
'
which
a society
is
plagued by discrimination is
hard
to
measure, however.
On
the
one
hand,
empirical studies based
on
field data
can deliver measures for earnings inequality
but
they
cannot
unveil discriminatory
practices
in
the
hiring process, for example. Moreover, field data are
not
collected
in
a controlled environment, so
that
the
researcher has typically
much
less
information about worker characteristics
than
is
available
to
the
employing firm.
Hence
'it
is
difficult to disentangle
the
effects
of
actual productivity differences from
employer discrimination.
On
the
other
hand,
laboratory experiments
on
dis-
crimination can be conducted
in
fully controlled settings.
What
is
measured there,
however,
is
the
behaviour
of
subjects
in
a sterile environment;
how
far
the
findings
of such experiments extend to employer-worker interactions in real-world labour
markets
is
unclear. Field experiments are a compromise between these approaches,
combining
the
advantages
of
controlled experiments with a field context.
1
With
regard to measuring hiring discrimination,
the
correspondence test
method
is
a
sensible way
to
measure
the
initial response
of
employers
to
varying characteristics
of artificial applicants.
This paper describes a correspondence test c,
onducted
in
the
German labour
market for
student
internships.
We
examine
the
hiring opportunities of individuals
with
a Turkish migration background.
In
2009 Germany had
about
2.5 million
persons (3% of its population)
with
a Turkish
ethnic
background (Statistisches
Bundesamt,
2010). Predominantly
in
the
1960s, migrants from Turkey came
to
Germany to enlarge its labour force. Forty years later,
the
children
and
grand-
1.
See
Harrison
and
List (2004) for a survey
on
field experiments,
First publ. in: German Economic Review ; 13 (2012), 1. - S. 1-20
http://dx.doi.org/10.1111/j.1468-0475.2011.00538.x
Konstanzer Online-Publikations-System (KOPS)
URN: http://nbn-resolving.de/urn:nbn:de:bsz:352-214529
children
of
these workers,
born
and
raised
in
Germany, represent a substantial share
of Germany's workforce. Uhlendorff .
and
Zimmermann (2009) show
that
these
workers need significantly more time
to
find
new
jobs
than
natives which gives rise
to
higher
unemployment
rates for workers
with
migration background. While
the
individual ethnic identity has some effects
on
labour supply, particularly
on
participation (Constant
and
Zimmermann, 2009),
on
search effort
and
on
reservation wages (Constant et al., 2009),
the
role of worker ethnicity for labour
demand
has
not
been explored.
It
is
evident, however,
that
a full integration
of
migrant workers
into
the
German labour market necessitates equal
employment
opportunities.
Our experiment generates a snapshot of
ethnic
discrimination in
one
particular
subsection
of
the
labour market. In particular, we send more
than
1,000 applica-
tions
to
firms
that
offer internships for students of economics
and
management
science. In practice such internships serve
as
important
prerequiSites for access
into
regular jobs. Although they are
not
well paid, a
student
who
has successfully
completed
an
internship gains job experience
and
significantly improves his
employment
opportunities after graduation.
2
Today,
the
completion of at least
one
internship
is
commonly
expected
and
is
often considered
as
a 'foot
in
the
door'.
We
also believe
that
the
high-skill labour market
is
a particularly challenging
one
for
students
with
migration backgrounds, since second generation immigrants are
underrepresented
in
high-skill jobs, whereas
they
account for a substantial share of
current university students.
3
To
each of 528 job advertisements, we send two similar applications,
one
with
a
Turkish-sounding
name
('Fatih Yildiz'
or
'Serkan Sezer')
and
one
with
a typical
German
name
('Dennis Langer' or 'Tobias Hartmann,).4 Importantly,
the
name
is
the
only
distinguishing characteristic of
the
applicant with Turkish ethnical
background. That
is,
all applicants have German citizenship
and
they
were
born
and
educated
in
Germany,
and
all of
them
specify 'German'
as
their
mother
tongue.
With
that
design, we are able to isolate
the
effect of ethnicity from possible
language effects.
We
create two slightly different types of applications
with
similar
grades, soft skills
and
photographs. For every job vacancy, applicant names are
randomly assigned to
the
two different applications. Furthermore,
the
amount
of
information provided
by
the
students varies between
the
two different applications.
In particular,
one
application type contains reference letters stating favourable
information
about the candidate's personality traits such
as
conscientiousness
and
2. Gault et
al.
(2000) find
that
business graduates in
the
United States gain faster access
into
employment
and obtain higher salaries when they have relevant internship experience.
We
are
not
aware of related studies for Germany.
3.
On
the
one hand, Liebig (2007, Table 9) shows
that
second generation immigrants are
underrepresented in high-skill professions such
as
legislators, senior officials, managers or
professionals.
For
instance, compared with natives, an average second generation immigrant
is
63%
less likely to be employed
as
a professional and
58%
more likely to work
as
a sa
le
s worker. On
the
other
hand, lsserstedt et
al.
(2010,
Ch
. 15) report
that
11% of
the
students at German
universities had a migrational background in
2009 (compared with 23% of
the
German population
in
the
age group 20- 24),
not
including foreign students with school education outside Germany.
4.
The preparation of bogus applicatiOns and
the
deception of employers are unavoidable necessities
to
analyze discrimination in a controlled field
environment
.
To
minimize the cost
on
employers,
we promptly and politely reply to a positive response by withdrawing
the
applicant's further
interest in
the
position.
See
Riach
and
Rich (2004) for a di
sc
ussion of
th
e ethical considerations
involved in
the
correspondence test method.
2
agreeableness.
We
use this variation
to
explore
the
effect of statistical discrimina-
tion versus taste-based discrimination.
s
The field experiment shows
that
an
application
with
a German-sounding
name
is
on
average 14% more likely to receive a callback. Discrimination is
more
pronounced
among
smaller firms: firms with less
than
50 employees give 'Dennis'
and 'Tobias'
about
24% more callbacks
than
'Fatih'
and
'Serkan'.
We
also find
evidence
that
a reasonable fraction
of
the
differential
treatment
can be attributed
to
statistical discrimination: while there
is
almost
no
difference
in
callback
probabilities for the application
that
is
equipped with personality
information
(37.4%
with
a German
name
vs. 36.9% with a Turkish name),
the
absence
of
such
information
in
the
other
application gives rise
to
significant differences
in
callback
probabilities (41.8% with a German
and
32.5%
with
a Turkish name).
Our results
can
be compared
with
those from
other
field studies
that
explore
ethnic discrimination
in
other
countries.
6
Across these studies,
the
measured
degree
of
differential
treatment
varies remarkably
with
the
respective context. In
the
US
labour market, Bertrand
and
Mullainathan (2004) show
that
applications
with white-sounding names receive
50% more callbacks for interviews
than
those
with African-American-sounding names. They find
that
the
racial gap
is
uniform
across occupation, industry
and
emp
loyer size. A similarly huge difference
in
callback rates
is
documented
by
Drydakis
and
Vlassis (2007),
who
analyze
the
labour market opportunities
of
Albanians in Greece. They find
that
Albanians
not
only
face a 43% smaller chance
of
access to occupations,
but
they
are also
significantly less likely
to
be registered with insurance coverage. For Arabs
in
Sweden, Carlsson
and
Rooth (2007) find
that
every fourth
emp
loyer discriminates
against
the
minority. Wood et at. (2009)
conduct
a correspondence test
in
Britain,
finding
that
there are considerable gaps
in
callbacks between whites
and
several
different ethnical groups. For
the
German labour market, Goldberg
et
al. (1996)
conducted various field experiments
to
analyze
ethnic
discrimination of migrants,
also finding substantial differences
in
callback rates. However,
the
legal framework
has changed since 1994
when
their experiments were conducted.
7
Further,
Goldberg
and
colleagues analyze
the
situation of migrants,
that
is,
workers
that
were
born
in
Turkey
and
with Turkish
mother
tongue, whereas we focus
on
German
citizens
with
a Turkish migrational background.
Compared
with
these
other
studies,
the
quantitative
extent
of
discrimination
in
our
experiment seems
to
be small. But there are several reasons
why
international
5.
Several studies explore
the
determinants of prejudice against foreigners or persons with migration
background.
For
instance, Fertig and Schmidt (2010) find
that
education
is
a key determinant for
such attitudes. Dustmann and
Pre
s
ton
(2001) discu
ss
the
interplay between the
ethnic
composition of neighborhoods and
the
local attitudes towards ethnic minorities: A high
concentration of minorities may l
ea
d to perceptions of threat and alienation,
but
can also reduce
unrealistic negative preconceptions.
6.
There are several field studies
that
test discrimination against other characteristics, for example
Neumark (1996). Goldin and
Rou
se
(2000) and Petit (2007) for gender, Banerjee et al. (2009) for
caste and religious groups in India, Rooth
(2007) for obesity and Weichselbaumer (2003) for sexual
orientation.
7. In August
2006, the German government passed an equal-treatment law ('Allgemeines
Gleichbehandlungsgesetz') which prohibits discrimination in hiring and promotion (among
others) and which encompasses several personal characteristics (including ethnicity).
As
this
legislation does
not
enta
il
any specific requirements on employment policies,
it
is
unclear whether
and
how hiring proce
sses
have changed since 2006.
3
comparisons between such numbers are difficult. First,
our
applications
contain
much
more information
than
those in
the
studies cited above. In particular,
in
Germany it
is
common
practice to submit
not
only
a resume,
but
al
so
copies
of
all
school
and
university certificates; these certificates provide detailed hard-evidence
information
about
various skills. Second, we focus
on
a high-skill segment of
the
labour market;
it
is
unclear whether
ethnic
discrimination
in
Germany
is
stronger
in
other
segments of
the
labour market./l Third, individual attitudes to
ethnic
minorities
depend
also
on
a country's immigration pOlicy.
9
There are also a few laboratory experiments
on
racial/ethnical discrimination.
Fershtman
and
Gneezy (2001) examined behaviour
in
a trust game where
one
person has
the
option
to
pass part of his/her
money
to
an
unknown
partner whose
name
signals a different
ethnic
background (of 'Ashkenazic' or 'Eastern' origin,
among
undergraduate students in Israel). They find evidence for considerable
mistrust against
men
of
Eastern origin. Castillo
and
Petrie (2010)
conduct
a public-
good experiment with group formation
to
investigate whether people discriminate
by race (black/white) or
by
gender.
To
explore statistical discrimination,
they
also
vary information
on
average past contributions
to
the
public good before
individuals decide group membership. They find
that
race becomes irrelevant
once private information becomes available, which suggests
that
discrimination is
mainly statistical. For a survey of laboratory experiments
on
discrimination, see
Anderson
et al. (2006).
The rest of this paper is structured
as
follows. Section 2 describes
the
experimental
design
and
Section 3 presents
and
discusses
the
results. Section 4 concludes.
2. EXPERIMENTAL DESIGN
2.
1.
The
vacancies
The experiment focuses
on
a speCific segment
of
the
labour market,
in
particular
the
market for internships for students
in
economics
and
business. This restriction
allows us
to
completely
automate
the
application process
by
sending serial letters
and
to
eliminate potential bias caused
by
individually written
and
adjusted
applications.
We
also restrict
our
study
to
internships
within
Germany.
We
only
apply for internships
with
a
duration
ranging from six weeks
to
six
months
and
consider all reasonable vacancies posted
at
large
internet
job sites (such
as
monster.
de
and
jobscout24.de).lo The field experiment was
conducted
in
two
8. Carlsson and Rooth (2007) find large differences across occupations, with differences in callback
rates varying from
10% (computer professionals) to over 100% (shop sales and cleaning). But even
in their study, there are several high-skill segments of
the
labour market with much higher
discrimination rates
than
in
our
study. Large
ca
ll
back differences across occupations are also
observed by Wood
et al. (2009).
9.
As
Bauer et al. (2000) show, natives in countries
that
receive
many
non-economic migrants are
mainly worried about increasing crime rates. In contrast, natives in countries
that
select migrants
by skill worry more about labour market competition.
Su
ch country-specific effects may limit
the
transferability of results.
10.
Weitzel et al. (2010) report
that
72% of the new hires of
th
e 1,000 largest firms in Germany in 2009
can be attributed to
internet
job search compared with only
13
.
7%
attributed to job advertisements
in
print
media.
For
the
United States, Stevenson (2009) reports that, in
the
year 2001, 69% of
the
unemp
loyed with college degrees (all age groups) were searching for jobs online. Given the current
relevance
of
the
internet, especially for young adults, it
is
unlikely
that
the
focus
on
online job
advertisements biases our results.
4
waves,
the
first
one
covering vacancies posted
in
December 2007
and
January 2008,
the
second
one
considering positions posted
in
December 2008. Although all firms
explicitly search for students
in
economics or business programmes,
the
internships
are quite heterogeneous. This concerns employer characteristics (size, sector,
location)
and
the
division
within
the
firm
(human
resources, marketing, finance
or
controlling). Most of
the
vacancies are at firms
with
500
or
more employees. Large
firms
and
banks are
the
most relevant employers for graduates
of
economics
and
business,
and
they
are more likely to post their vacancies
on
large
internet
job sites.
Further, there are only few vacancies from East Germany since
most
large
corporations have their headquarters
in
West Germany.
2.2. Applications
All
applicants are second-year students of age
21
or
22. Our applications are quite
comprehensive compared with
other
field studies
on
hiring discrimination. In
particular, each application contains a cover letter, a curriculum vitae
(CV),
a high-
school certificate
and
a certificate
documenting
university grades
in
the
first year.
In
the
German labour market, this
amount
of
information
is
necessary
to
achieve a
reasonable callback rate. In fact,
most
employers explicitly request copies
of
all
these certificates. Omitting
them
would bias
our
results significantly since
only
quite unattractive employers would respond
to
an
application
that
contains
only
a resume.
We
create
two
slightly different types of resumes, labelled type A
and
type
B,
such
that
we
can
send
two
applications
to
each firm.
11
Students of
both
types were born,
raised
and
educated
in
West Germany,
but
in
different regions,
one
in
the
state
of
North Rhine-Westphalia,
the
other
one
in Baden-Wuerttemberg. After graduating
from school,
both
skip military service,' work at a
summer
job
and
then
attend
different universities. Both aim at a bachelor's degree
in
business economics.
At
the
time of
the
application,
they
are
in
their
third
semester
and
are applying for
an
internship during their fourth semester. The school
and
university certificates
document
grades between 'good'
and
'very good', so
that
the
students range
in
the
top
25%
of
their peer groups.
Both types are fluent
in
English
and
they
have basic knowledge of
one
further
foreign language. Since applications are identical for applicants with a Turkish
and
a German name,
the
applicant
with
the
Turkish
name
is
a native German speaker
and
he
also does
not
report
any
command
of Turkish
in
his
CV.
Both types have
reasonably developed
computer
skills. Moreover,
both
applicants state
in
their
CV
that
they
had
two
minor
part-time jobs,
but
while type B provides two letters of
reference from previous employers, type A does
not
add
any
related documents.
The two reference letters
contain
positive statements
about
the
student's
personality (affability,
commitment,
capacity for teamwork, conscientiousness).
This variation
in
information
is
used
to
analyze
the
effects
of
statistical
discrimination. In all
other
dimensions, applications of types A
and
B are rather
similar; particularly, there are
only
minor
deviations in individual school
and
university grades. Hence,
the
variation
in
information about personality is
the
decisive informational difference between these types.
11. CVs
of
both
types are contained in Appendix
B.
5