Firm-Specific Gender and Ethnicity Pay Differentials in Britain

Stephen Pudney and Nikolaos Theodoropoulos

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: Using matched employer-employee data we examine firm-specific gender and ethnicity pay differentials in Britain. We estimate an econometric earnings model using the partially-observed pay variable provided in the data and test the normality assumption that underlies the usual interval regression technique. We then estimate alternative specifications allowing for firm-specific random effects, using a semi-parametric finite mixture estimator. The empirical estimation reveals a 22% (13%) weekly (hourly) gender pay gap and a 28% (19%) weekly (hourly) pay race gap. Strikingly, although significant and sizeable the firm-specific effects are not correlated with other variables that may act as indirect indicators of pay differentials

Keywords: Matched employer-employee data; pay differentials; random effects; semi-parametric finite mixture estimator. (search for similar items in EconPapers)
Pages: 35 pages
Date: 2006-09
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:9-2006

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