From Ethnic Prejudice to Employment Discrimination: The Role of Small Firms as Mediators

Gabor Kertesi, János Köllő (), Róbert Károlyi and Lajos Szabó
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Gabor Kertesi: Institute of Economics, Budapest
János Köllő: Institute of Economics, Budapest
Róbert Károlyi: HUN-REN Centre for Economic and Regional Studies

No 17901, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Hungary's sizeable Roma minority is hit by massive prejudice. Using 2011 Census data and supplementary sources, we study how ethnic bias translates to employment discrimination in local labor markets. The male ethnic employment gap, adjusted for a rich battery of controls, was 20-40 percent wider than average if, and only if, the local population strongly supported an openly anti-Roma far-right party and, at the same time, small firms had a substantial share in the local economy. Roma women's (very low) employment is less responsive to prejudice and the small firm share. The results for men, the sole breadwinners in most Roma families, survive robustness checks and confrontation with alternative explanations. Since small firms easily elude the anti-discrimination regulations, the results draw attention to the limits of legal instruments and call for active policy.

Keywords: minorities; discrimination; regional labor markets; small firms (search for similar items in EconPapers)
JEL-codes: D22 J15 J71 R23 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025-05
New Economics Papers: this item is included in nep-lab, nep-sbm and nep-tra
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