Abstract:

We study the role of ethnicity in experimental labor markets where “employers” determine wages of “workers” who perform a real effort task. This task requires a true skill which we show is not affected by minority status. In some treatments, we provide subtle priming to employers about minority status of workers as commonly depicted on Chinese “Hukou” identification system. We conduct our experiments at two sites located in provinces that differ by their historical shares of ethnic groups in the population. We find that: (1) Han and minority workers are equally productive in both provinces; (2) in the diverse province, there is no difference in the wages between Han and minority workers; (3) in the non-diverse province, minority workers receive 4%-7% lower wages than Han workers.

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