Previous research and theorizing suggest ethnic discrimination in the labor market should be higher when employers face no search difficulties in the hiring process —i.e., discrimination increases with the level of competition for vacancies. This model assumes employers have a hidden taste or propensity for discrimination, which they can only realize when they have enough candidates to choose from. This study presents an alternative mechanism that is consistent with both norm-referenced evaluation and statistical discrimination theory. This alternative argument contends employers learn about each applicant’s quality by comparing them with other candidates in the pool. This process of evaluation by comparison allows employers to fill at least some of the information gaps on which statistical discrimination is based. Thus, the larger the pool of candidates, the more information employers can acquire. This means, unless employers have a hidden taste for discrimination, ethnic minorities who are qualified for a given job will have greater employment chances if they can compete in a large pool. Using data from a unique online correspondence test, which retrieves information on the size of the applicant pool for each job vacancy, our results confirm this alternative hypothesis, showing that ethnic discrimination in the labor market is lower when there is a higher level of competition, thus challenging previous research.