As an area of study among behavioral economists, psychologists, and sociologists, it ranges beyond discrimination so non-cognitive factors can also be taken into consideration in order to explain why unwarranted differences exist between individuals with similar abilities because they are members of different ethnicities.
Heath originally looked at the ethnic penalty by making comparisons between two groups in Britain, whites and blacks, noting that unemployment of black African men was twice as high as unemployment of white men.
[1] Using 2001 UK census data, Johnston et al. suggests that all ethno-religious groups in the UK experienced ethnic penalties in the labour market, with the exception of White British ethno-religious groups.
[2] Carmichael and Woods additionally show that "the penalties paid vary considerably between the minority groups" studied, in the case of black, Indian, Pakistani, and Bangladeshi workers in the United Kingdom.
Ethnic penalties are usually measured as differences in labour market outcomes between minorities and the majority that remain after controlling for human capital and social background characteristics in a statistical model.