Why has racial and ethnic discrimination been so stubborn in Australia

Alison Booth, Andrew Leigh and Elena Varganova (2009: does racial and ethnic discrimination vary across minority groups? Evidence from three experiments) have found that there were economically and statistically significant differences in obtaining an interview when applying for an entry level job of the same kind between ethnic groups with the same education level but different ethnic names.

The differences vary from less severe discrimination for Italians to more severe for Chinese and Middle Easterners. The former group is a more established migrant group in Australia and the latter groups are more recent arrival ones. These two groups both have to submit at least 50 per cent more applications in order to receive the same number of interview opportunities as people with Anglo names / background.

What is more disturbing is their findings that by comparing with earlier studies and findings, their results did not indicate that ethnic and racial discrimination fell in the past 20 years from 1986 to 2007.

Their findings may suggest a number of possibilities. One is that there might be some real differences in productivity between the different ethnic groups. If employers know there are differences in productivity, then they may want to employ people from more productive groups. But the jobs Booth, Leigh and Varganova selected are entry level jobs and the education level of those applicants do not seem to suggest that there is unlikely to be significant differences in productivity between those groups.

The second is that there might be perceived differences in productivity between those groups due to their cultural and language differences. This could be a plausible hypothesis for further test.

The third is there might be some influences that relate to the lengths of each groups establishments in Australia, especially after the Second World War. This could also be plausible and may be another useful hypothesis to test out.

Another set of hypotheses is related to the assumption of profit maximisation of firms, assuming that most of the employers selected in their survey are for profit organisations. A truly profit-maximising firm should not be discriminative in terms of ethnic groups unless there are productivity differences among them.

Even if a firm is profit maximising, it may still display some discrimination if there is discrimination in the hiring department of that firm. There could be a principal-agent problem between the firm and its personnel department. So the influences of the personnel department may be reflected in their selection of different ethnic groups in their hiring of people.

The findings of Booth, Leigh and Varganova are interesting, especially given that Australia is a multi-cultural country and racial and ethnic discrimination is legally not allowed. Further studies and testing are needed to determine the true causes of the found discrimination and correct it to provide everyone a truly equal opportunity of employment.