Anticipated labour market discrimination and educational achievement

Some theories suggest that ethnic minority students who anticipate discrimination in the labour market may invest more in easily observable human capital, such as education, to signal their productivity to employers. Empirical research has been hampered, however, by a lack of direct information on anticipated labour market treatment. We link ethnic minority student expectations of facing discrimination in the labour market to subsequent performance in high-stakes certificated national exams in England. Our findings suggest that anticipating labour market discrimination is associated with better exam performance, consistent with the view that students are seeking to counteract potential future penalties.