The Economics of Perceived Discrimination - An empirical investigation on the relationship between subjective views on job market hindrances and economic aspirations

Sammanfattning: This study attempts to investigate the effects that perceived discrimination has on economic aspirations. Perceived discrimination is defined as the subjective perception of hindrances on the job market, which consists of actual hindrances (real discrimination) and a subjective bias. The research question is whether perceived discrimination impacts on economic aspirations independently of real discrimination, i.e. that the subjective biases of discrimination have real economic impacts. In order to investigate the proposition, an economic model is developed and the predictions are tested empirically by regressing views on discrimination of immigrants in Sweden on proxies for aspirations. The findings confirm the proposed idea that perceived discrimination impacts on economic aspirations and that these perceptions not necessarily need align with real discrimination to have an impact. This indicates that eradicating structural barriers to previously disadvantaged groups does not suffice as remedy to the educational gap between ethnic majorities and minorities that most European nations face today. In order to promote economic aspirations among citizens perceiving discrimination, removing real discrimination is key. However, aiming to fully bridge the gap, the efforts must be accompanied by measures combating also the subjective biases of discrimination.