Is the term coined by sociologist Anthony Heath to describe the measure of disadvantage suffered by ethnic minorities in the labour market. To calculate the ethnic penalty, it is possible to measure an effect, such as the rate of unemployment, and then control for a range of variables that might influence this, such as education, qualifications, previous experience, sex, and so forth. The ethnic penalty is the difference in the measured effect (e.g. rate of unemployment) between the various ethnic minority groups compared with the ethnic majority (whites) once all of the other variables have been controlled. In other words, when all other differences have been eliminated, the residual differences between ethnic groups are left (the ethnic penalties) and these are often expressed as proportions: for instance, black African men are twice as likely to be unemployed as white men; or Bangladeshi women are four times as likely to be unemployed as white women. In instances where a particular ethnic group fares better than the comparator group (which is usually the white majority) then this ‘advantage’ is described as an ‘ethnic premium’. Ethnic penalties are measures of disadvantage, but they do not automatically lead to the conclusion that there has been discrimination.
Subjects: Human Resource Management.