Mechanisms of exclusion: ethnic discrimination in the Swedish labour market

Abstract

By reviewing recent labour market research, this article presents strong arguments for the existence of rather extensive ethnic discrimination in the Swedish labour market. Migrants—in particular non‐European migrants—have considerably higher unemployment rates and lower wage incomes than native Swedes. Although reduced, a significant gap remains when controlling for human capital factors (such as education) and for so‐called ‘country‐specific’ human capital factors (such as years spent in Sweden). Three mechanisms of exclusion are identified as particularly important: statistical discrimination (based on stereotypical thinking), network effects (due to separated, ethnically homogeneous networks), and institutional discrimination. Key actors holding gatekeeper positions in the labour market discriminate against migrants in a two‐fold way: by making decisions about recruitment, etc. based on stereotypical—and often prejudiced—beliefs about group‐specific characteristics rather than on individual skills; and by choosing people they know or who have been recommended by someone they know for vacant positions (network recruitment). Neither of these mechanisms involves much reflection, which implies that actors in gatekeeper positions often discriminate against migrants without being aware of it. Finally, state programmes and legislation sometimes have unintended consequences which may lead to institutional discrimination.