Field experiments have provided ample evidence of ethnic and racial discrimination in the labour market. Less is known about how discrimination varies in multi-ethnic societies, where the ethnic composition of populations is different across locations. Inter-group contact and institutional arrangements for ethnic minorities can mitigate the sense of group threat and reduce discrimination. To provide empirical evidence of this, we conduct a field experiment of ethnic discrimination in Russia with a sample of over 9,000 job applications. We compare ethnically homogeneous cities and cities with ethnically mixed populations and privileged institutional status of ethnic minorities. We find strong discrimination against visible minorities in the former but much weaker discrimination in the latter. These findings demonstrate how institutions and historical contexts of inter-group relations can affect ethnic prejudice and discrimination.

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