Background 9 Heckman went on to describe discrimination as 'the problem of a previous era'. Employers are interested in the productivity or employability of their workforce These can be seen as synonyms for the term'skills'used by Heckman.It is by no means clear that the statistical approach used by Heath and Cheung,being limited to the characteristics recorded on major surveys,is able to approximate to these characteristics of employees or potential employees. An alternative view of some significant causes of ethnic penalties is that they may arise through a process known as 'statistical discrimination'.As described by Pager and Karafin(2009)much of the discussion on the causes of discrimination focuses on the rationality of employer decision making.Information is scarce when employers are making recruitment decisions.Knowing about the age and education of an applicant may be insufficient,given that the employer is also interested in other factors that influence productivity,such as motivation and social skills.In this situation,employers may rely on observable characteristics that they believe are correlated with the unobserved characteristics.The implication of this view is that employers are behaving in a manner that may appear rational(albeit what they are doing contravenes legislation on equal opportunities),rather than being motivated by 'preference-based'discrimination,when they make decisions that result in ethnic penalties. Discriminatory outcomes may also result from processes that are not consciously intended to be discriminatory but which nevertheless have that effect.Roberts and Campbell(2006)find no evidence of overt discrimination in their analysis of interviews for low-skilled jobs,but identify penalties for first generation migrants who are not familiar with the conventions of British job interview question style and organisational culture. Another aspect of this more indirect discrimination would be where recruiters do not apply strictly job-related criteria in their recruitment process,and instead base choices on how personable they themselves find a candidate to be.In some cases this may have the effect that they recruit people from their own ethnic and socio- demographic group. 1.3 Policy measures to reduce inequality Heath and Cheung(2006)provide a useful discussion of potential policy measures that may address the ethnic penalties in employment.Among the policy measures they discuss are: addressing educational inequalities; active labour market policies(not necessarily targeted at ethnic minorities,but towards residents in deprived areas); improved careers services at further education colleges and universities;9 Heckman went on to describe discrimination as ‘the problem of a previous era’. Employers are interested in the productivity or employability of their workforce. These can be seen as synonyms for the term ‘skills’ used by Heckman. It is by no means clear that the statistical approach used by Heath and Cheung, being limited to the characteristics recorded on major surveys, is able to approximate to these characteristics of employees or potential employees. An alternative view of some significant causes of ethnic penalties is that they may arise through a process known as ‘statistical discrimination’. As described by Pager and Karafin (2009) much of the discussion on the causes of discrimination focuses on the rationality of employer decision making. Information is scarce when employers are making recruitment decisions. Knowing about the age and education of an applicant may be insufficient, given that the employer is also interested in other factors that influence productivity, such as motivation and social skills. In this situation, employers may rely on observable characteristics that they believe are correlated with the unobserved characteristics. The implication of this view is that employers are behaving in a manner that may appear rational (albeit what they are doing contravenes legislation on equal opportunities), rather than being motivated by ‘preference-based’ discrimination, when they make decisions that result in ethnic penalties. Discriminatory outcomes may also result from processes that are not consciously intended to be discriminatory but which nevertheless have that effect. Roberts and Campbell (2006) find no evidence of overt discrimination in their analysis of interviews for low-skilled jobs, but identify penalties for first generation migrants who are not familiar with the conventions of British job interview question style and organisational culture. Another aspect of this more indirect discrimination would be where recruiters do not apply strictly job-related criteria in their recruitment process, and instead base choices on how personable they themselves find a candidate to be. In some cases this may have the effect that they recruit people from their own ethnic and socio￾demographic group. 1.3 Policy measures to reduce inequality Heath and Cheung (2006) provide a useful discussion of potential policy measures that may address the ethnic penalties in employment. Among the policy measures they discuss are: • addressing educational inequalities; • active labour market policies (not necessarily targeted at ethnic minorities, but towards residents in deprived areas); • improved careers services at further education colleges and universities; Background