“Are you in the mafia?” : Ethnic discrimination on the American labor market

Abstract: How did the Italian mafia affect honest Italian descendants on the American labor market? This is a study about how an exogenous shock to ethnic discrimination on the labor market affected a whole ethnic group. The goal with this study is to analyze how a massacre by Al Capone’s crew in 1929 affected Italian workers on the American labor market. Using linked census-data of all working-age men 1920-30, this paper studies the ethnic discrimination of second-generation Italian immigrants. The treatment group is Italian men, and the control groups are other immigrants and natives. Three different outcome variables will be used, employment, wage employment, and self-employment. The results suggest that Italians saw lower chances of being employed, lower chances of being wage employed, and higher chances of being self-employed post 1930 compared to other immigrants and natives. This suggest that Italians were forced into self-employment. A conclusion that the ethnic discrimination towards Italians is a result of the tragic massacre cannot be made due to no data on the news distribution. The news distribution system in America could give an indication on how the news were shown in surrounding areas and this could therefore reflect the employers’ attitudes towards Italians. Further studies are therefore required in order to conclude if the massacre gave Italians a harder time on the labor market or not but for now, we have an indication on that Italians were more affected post 1930 compared to other immigrants and natives.