Are Ethnic Income Gaps a Result of Attitudes? : Differences in earnings between natives and immigrants on the Swedish labor market

Sammanfattning: Are ethnic income gaps a result of attitudes? This paper studies how natives’ negative attitudes towards immigrants affect the income gap on the Swedish labor market. The significance of this question is based on policies in the European union that work towards labor markets that are free from discrimination that are based on characteristics such as ethnicity, gender etc. This paper will investigate the situation on the Swedish labor market in hopes that both foreign and domestic policy makers will work together, towards creating a labor market that does not discriminate by race. To answer this question, we use a behavioral measure of the general public as an attitude measure, which also should be fairly representative for the employers’ attitudes in the same region. This measure is obtained from a field experiment conducted on the Swedish housing market. This data addressed the general public’s attitudes towards immigrants in terms of positive callbacks to a housing contract. This data combined with data on earnings, age, sex, race, and education, from Statistics Sweden (SCB), could be used to run four different OLS-regressions in Stata. We found weak to no evidence that attitudes contribute to the income gap due to lack of data on employment, unemployment, hourly wages, and firm information. A further investigation containing data on work hours and hourly wages are essential to conclude that attitudes affect the income gap. Our hopes are that future studies regarding differences in earnings between natives and immigrants keep getting studied with additional data on hourly wages and employment.