The Economics of Vulnerability and Discrimination

This dissertation consists of four essays on two interconnected themes: vulnerability and ethnicity-based discrimination. It examines how political representation, perceptions of vulnerability, and ethnic biases influence social outcomes, economic behavior, and distributive decisions.

The first chapter studies the causal impact of increased female political representation on child marriage and adolescent fertility in rural India. It finds that greater representation of women leads to declines in both practices and improves girls’ educational attainment. The second chapter investigates whether individuals compromise their fairness ideals when allocating resources between recipients of different ethnic backgrounds. Drawing on experimental evidence from Germany and France, it reveals consistent discrimination against individuals with non-Western immigrant origins. It also examines the effect of “moral wiggle room”—situations where multiple fairness norms can plausibly justify different decisions—and finds that although discrimination persists, normative ambiguity does not exacerbate it. The third chapter analyzes whether majority group members in Germany and France apply double standards in redistribution when recipients differ in both ethnicity and productivity. Using data from a large, representative online experiment, it finds that merit is not rewarded in an ethnicity-neutral way: more money is transferred from “rich” minority individuals to “poor” majority individuals than in the reverse scenario, even when performance differences are clearly communicated and controlled for. The fourth chapter explores how the feeling of vulnerability affects economic decision making. Vulnerability is defined as lacking a “safe” action that guarantees respectful treatment regardless of others’ behavior. An illustrative example shows that individuals demand higher reservation wages when such protections are missing, even if they would not have chosen the safe action when available. An online experiment provides empirical support for this framework, revealing that individuals are willing to pay for having access to safe actions—even when the risk of mistreatment is minimal.