This article reviews the comparative literature on ethnic penalties in Western labour markets. Although there is considerable variation between ethnic groups, immigrants and descendants, and across national contexts in terms of the magnitude of ethnic penalties, ethnic minorities of non-European origin experience disadvantages in all contexts. Discussing the striking cross-national variation, I highlight the impact of the economy, legacies of immigration policies, historically different citizenship regimes and the occurrence of selectivity in educational systems. In explaining why ethnic disadvantage occurs in all contexts, I pay particular attention to the role of discrimination in employment.