Ethnic Discrimination in the Greek Labour Market: Occupational Access, Insurance Coverage, and Wage Offers

Ethnic Discrimination in the Greek Labour Market: Occupational Access, Insurance Coverage, and Wage Offers

The paper investigates whether low skilled male Albanians face unequal treatment in the Greek labour market, two years after the national adoption of the European anti-discrimination employment legislation.

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There is significant literature across social sciences, which analyzes discrimination in labour markets on the grounds of race and ethnicity. In Greece, however, little work has been done in measuring discrimination and what we do know comes mainly from national observatories. The scope of this paper is to measure the existence of racial discrimination in the Greek private market, two years after the national adoption of the European anti-discrimination employment legislation (2005/3304).

Racial/ethnic discrimination has been a particular focus of recent efforts by European lawmakers, at least in part to the dramatic growth of racism in Europe following the end of Communism. We are particularly interested in investigating whether male Albanians 1 face discriminatory treatment in the labour market, compared to Greeks, and to evaluate whether stereotypes prejudice the Greek employers’ screening processes.

Due to the absence of standardized economic data we employ the Correspondence Test method in order to isolate the ethnic discrimination trend for a specific period. The correspondence test is used for detecting discrimination in the preliminary stage of the selection process, which for the ethnic minorities is seen to be the most crucial barrier to the labour market. A typical correspondence test entails that the researcher sends two equal - in human capital- applications (CV’s), to advertised job openings. The only characteristic that differs between the two (pseudo) applications is the ethnicity of the candidates. Ethnic discrimination is then measured by the difference in the number of call backs for interview between the two ethnic groups. The main advantage of this approach is that one can get direct measurements of the employers’ attitudes2 In our study we extend this test by gathering data concerning insurance coverage registrations to the Social Security Organization (IKA) as well as wage offers, in cases of positive responses. At this instance, in contrast to the customary methods of interview data and wage decomposition, we choose the correspondence test for two reasons: First, because interview data is a rather biased method, since native (migrant) workers may overstate (understate) their position in the labour market. Whilst, researchers can with the correspondence test themselves act as workers and record the reality. Second, because Census data concerning migrant wages are not available, in Greece. While, even in countries where such data are available,3 wage decomposition has been subject to considerable criticism as it is thought to be a biased method for discrimination tests4.

Thus, our study examines labour market discrimination by essentially using experimental data. Concentrating on low skilled workers our sample particularly refers to: (a) office jobs, (b) factory jobs, (c) café and restaurant services and (d) shop sales. Our findings provide strong evidence for discrimination against Albanians in all three dimensions. Albanians face 43.5% less chance of access to occupations. More interestingly, concentrating on the 49.7% equal chance cases of access to occupations, we found that Albanians face 36.5% less chance of being registered with insurance coverage, while their potential wage contracts are 8.8% below those of Greeks, and 5.3% below the legal minimum wage. Last, but not least, in order to evaluate the reasons for wage discrimination, we appealed to the most appropriate group to judge: The employers who defined the outcome. Using an indirect method, we found that the factors contributing to wage inequality are the firms’ profit strategies (accounting for the 84.4% of the total), followed by ambiguities concerning Albanians’ productivity (9.6%), whilst a “dislike” against Albanians accounts only for the 7.8%. 

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