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Accounting for firms in ethnicity wage gaps throughout the earnings distribution
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Accounting for firms in ethnicity wage gaps throughout the earnings distribution

Author

Listed:
  • Van Phan
  • Carl Singleton
  • Alex Bryson
  • John Forth
  • Felix Ritchie
  • Lucy Stokes
  • Damian Whittard

Abstract

Ethnicity wage gaps in Great Britain are large and have persisted over time. Previous studies of these gaps have been almost exclusively confined to analyses of household data, so they could not account for the role played by individual employers, despite growing evidence of their wage-setting power. We study ethnicity wage gaps using high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the national census for England and Wales. We show that firm-specific wage effects account for sizeable parts of the estimated differences between the wages of white and ethnic minority workers at the mean and other points in the wage distribution, which would otherwise mostly have been attributed to differences in individual worker attributes, such as education levels, occupations, and locations. Nevertheless, there are substantial gaps between the wage structures of white and ethnic minority employees which cannot be accounted for by who people work for or other attributes, especially among higher earners.

Suggested Citation

  • Van Phan & Carl Singleton & Alex Bryson & John Forth & Felix Ritchie & Lucy Stokes & Damian Whittard, 2022. "Accounting for firms in ethnicity wage gaps throughout the earnings distribution," DoQSS Working Papers 22-03, Quantitative Social Science - UCL Social Research Institute, University College London.
    • Handle: RePEc:qss:dqsswp:2203
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    2. Kaya, Ezgi, 2024. "Labour Market Performance of Immigrants: New Evidence from Linked Administrative Data," GLO Discussion Paper Series 1418, Global Labor Organization (GLO).
    3. Van Phan & Carl Singleton & Alex Bryson & John Forth & Felix Ritchie & Lucy Stokes & Damian Whittard, 2023. "Accounting for firms in gender-ethnicity wage gaps throughout the earnings distribution," Economics Discussion Papers em-dp2023-16, Department of Economics, University of Reading.
    4. Sébastien Willis, 2022. "Workplace Segregation and the Labour Market Performance of Immigrants," CESifo Working Paper Series 9895, CESifo.

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    More about this item

    Keywords

    Employer-Employee Data; Unconditional Quantile Regression; Decomposition Methods; UK Labour Market;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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