Customer Discrimination and Employment Outcomes: Theory and Evidence from the French Labor Market

Pierre-Philippe Combes (1) , Bruno Decreuse (1) , Morgane Laouenan (1) , Alain Trannoy (1)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille

The paper investigates the link between the over-exposure of African immigrants to unemployment in France and their under-representation in jobs in contact with customers. We build a two-sector matching model with ethnic sector-specific preferences, economy-wide employer discrimination, and customer discrimination in jobs in contact with customers. The outcomes of the model allow us to build a test of ethnic discrimination in general and customer discrimination in particular. We run the test on French individual data in a cross-section of Employment Areas. Our results show that there is customer discrimination in the French labor market for contact jobs; a decrease in discrimination intensity by one standard deviation would reduce the raw unemployment rate of African immigrants by 4.3 percentage points.

Keywords: Customer Discrimination; Matching frictions; Jobs in contact; Ethnic Unemployment

Domains: Economics and Finance

Pierre-Philippe Combes, Bruno Decreuse, Morgane Laouenan, Alain Trannoy. Customer Discrimination and Employment Outcomes: Theory and Evidence from the French Labor Market. 2011. ⟨halshs-00624435⟩