No sign of increased ethnic discrimination during a crisis: evidence from the Covid-19 pandemic

Abstract

Abstract When crises hit, social theory predicts increased hostility toward immigrants. We exploit the Covid-19 pandemic as a unique exogenous crisis and examine whether discrimination increased in its wake. Repeating a field experiment in the Swiss housing market in 2018 and 2020, we find no evidence of increased discrimination against the most important immigrant groups in Switzerland. Contrarily, when uncertainty dominates the market, proprietors appear to change their selection behavior by substituting signals of ethnicity for other markers of solvency and reliability and, consequently, invitation rates for immigrants increase relative to native house-hunters. We conclude that crises do not necessarily increase discriminatory behavior in market situations.