The unemployment of ethnic minority groups in the Netherlands

Contrary to wage discrimination, differential employment probabilities due to ethnic differences is a hitherto neglected issue. To tackle this issue, we make use of a symmetric approach to the labor market. By estimating reservation wages, maximum wages, and institutional wages, we determine hiring chances for ethnic minority groups in the Netherlands and the native Dutch. It turns out that half of the difference in hiring chances between these two groups is due to differences in personal characteristics, while the other half is due to differences in supply behavior of individuals and especially in demand behavior of employers.