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

The paper investigates the link between the overexposure of African immigrants to unemployment in France and their underrepresentation in jobs in contact with customers. We build a two-sector matching model with ethnic sector-specific preferences, economywide 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 local labor markets demployment areas_. Our results show both ethnic and customer discrimination in the French labor market.