Ethnic bias, economic achievement and trust between large ethnic groups: A study in Germany and the U.S

Sophie Cetre, Yann Algan, Gianluca Grimalda, Fabrice Murtin, David Pipke, Louis Putterman, Ulrich Schmidt and Vincent Siegerink

Journal of Economic Behavior & Organization, 2024, vol. 224, issue C, 996-1021

Abstract: Evidence for ingroup bias is extensive, yet the distinct patterns of discrimination among dominant ethnic groups in the diverse societies of modern industrial nations such as the United States and Germany remain largely unexplored. Incentivized trust games in nationally-representative samples from both countries reveal biases of roughly equal size by non-Hispanic White Americans, Hispanic Americans, and African Americans against each outgroup. In Germany, the majority demonstrates twice as much bias against Turkish minorities compared to Eastern Europeans. Interestingly, both minority groups send similar amounts to ethnic Germans and members of their own groups. We examine the notion that outgroup discrimination by majority group members stems from stereotypes of minorities as economically unsuccessful, employing trust games with high-income counterparts. We find that majority senders’ bias against minority receivers declines when receivers are known to have high incomes, in line with that idea. Interestingly, some minority groups, especially Turkish descendants, display a negative propensity to transfer to rich members of their ingroup in comparison with outgroup members, relative to baseline. While we focus on differences in sending by ethnic pairing, we note that all participants send less to second movers identified as high income, and discuss possible explanations. We estimate that four-fifths of the observed ingroup bias is taste-based rather than due to expected trustworthiness differences. This estimation is robust to identifying the purely altruistic component of trust game sending toward each ethnic group, including one's own.

Keywords: Trust; Ethnic discrimination; Income inequality; Online experiment (search for similar items in EconPapers)
JEL-codes: C99 J71 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Ethnic bias, economic achievement and trust between large ethnic groups: A study in Germany and the U.S (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:224:y:2024:i:c:p:996-1021

DOI: 10.1016/j.jebo.2024.07.003

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