On Racial Discrimination in the Labour Market

This thesis studies racial discrimination in the labour market, and contains three sections. The first section is titled, “Racial Discrimination and White First Name Adoption: A Field Experiment in the Australian Labour Market.” The study investigates the effect of using a White first name on the probability of obtaining an interview offer for Chinese job applicants in the Australian labour market. The adoption of White first names by Chinese is a widely observed phenomena in Australia and abroad. Fictitious CVs are sent in response to entry level graduate and administration assistant job advertisements. I include three different name types: White and Chinese names, and a third type referred to as the ‘Adopters’, which explicitly combines a Chinese last name with a White first name. Having a Chinese last name strongly indicates that the Adopters are of Chinese ancestry. I discover that the difference in interview offers between White and Chinese names is approximately 8 percentage points. However, using a White first name dramatically reduces the Chinese-White racial gap: the Adopters are 50 percent more likely to receive an interview offer compared to Chinese names, even though both job applicants have a Chinese last name. Furthermore, I also find that the benefit of a White first name varies according to the skill level of the job. For graduate vacancies, there is no improvement in interview offers for Adopters; both Chinese and Adopter CVs face similar racial gaps compared to White job applicants. However, in administration assistant jobs, the racial gap completely attenuates; Adopters are just as likely as White names to receive an interview offer, while job applicants who retain a Chinese first name continue to receive significantly fewer interview opportunities. A supplementary analysis find that the results are robust to controlling for recruiter attributes. These results indicate that there are substantial returns to first name naturalisation in the Australian labour market. The second section of this thesis is titled, “Employer Learning and Intra-Racial Wage Dynamics.” Whilst substantial research has identified a large and persistent residual wage gap between distinct racial groups in the labour market, there is comparatively little attention on the examination of wage gaps that occur within a racial minority group. Using a longitudinal dataset that contains a rich array of labour market information, the HILDA survey, this study presents evidence on a range of dynamic labour market returns for the Chinese, Southern European, and British and New Zealand minorities in Australia. Building on the well-established literature on wage dynamics and employer learning, the empirical strategy focuses on the evolution of intra-racial wages, and the return to occupational mobility, for young workers who have recently transitioned into the labour market. The main findings of the paper are: 1) Compared to Whites, mainland Chinese and Greeks have large and negative returns to labour market experience, but Hong Kong Chinese and Italian wages remain constant over time, and 2) mainland Chinese accrue positive returns to occupational mobility, but not Hong Kong Chinese. The results presented in this paper indicate that there is significant variation in labour market outcomes that occur within a racial minority, which has thus far been unaccounted in the literature. Finally, the third section is titled, “Interracial Marriage, Patrilineal Surnames, and Racial Discrimination in the Australian Labour Market.” This study investigates the effect of race, as perceived by an Asian sounding surname, on earnings and employment status in the Australian labour market. The ideal empirical strategy separates the impact of race and group differences in skills on wages, which may otherwise lead to biased estimates. Building on Rubinstein and Brenner (2014), this study uses the non-random matching of spouses in the marriage market, in combination with the patrilineal inheritance of surnames, in an attempt to replicate the ceteris paribus conditions required to estimate the impact of perceived race on income and employment status. We compare the children of mixed Asian-White marriages, and find that they are highly comparable across a variety of traits related to human capital. But, importantly, the children of interracial marriages differ in how firm’s perceive their race, as indicated by their father’s surname. The main results demonstrate that, among mixed Asian-White males, an Asian surname is a significant disadvantage in the labour market: the wage gap between mixed Asian-White individuals is 11 percent against those with an Asian father. Supplementary results investigate the tradition of married women to adopt their husband’s surname on female wages. White women married to Asian men earn approximately 10 percent less than Asian women married to White men, despite being raised in a superior home environment, having greater educational attainment, lower fertility rate, and stronger labour force participation. We conclude that firms discriminate against individuals with an Asian sounding surname in the Australian labour market