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

Van Phan (), Carl Singleton, Alex Bryson, John Forth, Felix Ritchie (), Lucy Stokes () and Damian Whittard
Additional contact information
Van Phan: Bristol Business School, University of West of England
Felix Ritchie: Bristol Business School, University of West of England
Lucy Stokes: National Institute of Economic and Social Research (NIESR)

No em-dp2023-16, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: Previous studies of gender-ethnicity wage gaps have almost exclusively been confined to analyses of household data, so do not fully account for employer influence and wage-setting power. Exploiting high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the population 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, substantial gaps persist between the wages of white and ethnic minority employees, especially among higher earners. These patterns differ notably by gender and whichever ethnic minority group is compared with white workers. Since most of the wage disadvantage for ethnic minorities appears to sit within firms, our findings suggest that recent legislative reforms on firm-level gender pay gap transparency could be worth extending in the UK, to encompass gender-ethnicity gaps.

Keywords: Employer-Employee Data; Unconditional Quantile Regression; Decomposition Methods; UK Labour Market (search for similar items in EconPapers)
JEL-codes: J31 J7 J71 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-10-26
New Economics Papers: this item is included in nep-eur, nep-gen, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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