Is the Public Sector a Fairer Employer? Ethnic Employment Discrimination in the Public and Private Sectors

Abstract

Increasing immigration is creating multiethnic labor markets in many countries. As convincingly identified by a growing body of research, substantial ethnic discrimination inhibits immigrants' access to employment. The public sector may play an important role in creating labor market integration by setting a good example. Yet, little is known about sector differences in employment discrimination and whether public sector organizations are more or less likely than private firms to ethnically discriminate against prospective employees. Both theory and empirical studies suggest that public sector organizations discriminate less. To investigate these phenomena, we conducted two studies. Study 1 is a field experiment designed to explicitly investigate private and public sector differences in ethnic discrimination in Danish organizations' recruitment processes. Observing extensive discrimination favoring applicants with a Danish name, we find little evidence that the public sector is fairer in hiring decisions. Study 2, which is based on register data, highlights that sector differences and similarities in discrimination are context contingent and depend on organizational size and location. We propose a framework of sector and context interaction to explain organizational differences in ethnic discrimination.