The ethnic penalty is defined as the disadvantages ethnic minorities experience in the labour market compared to non-ethnic minority groups of the same human capital. Heath and Ridge look at the ethnic penalty by making comparisons between two groups in Britain, whites and blacks. They note that black African men are twice as likely to be unemployed as white men. Hasmath, examining the Canadian case, concludes that exclusionary discrimination is not the only potential explanation for ethnic penalties. Conditions such an individual's social network, a firm's working culture, and a community's social trust should be factored. Emerging work by behavioral economists, psychologists, and sociologists reinforce this premise, suggesting non-cognitive factors must be taken into consideration for explaining the ethnic penalty.
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