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

Author

Listed:
  • Van Phan

    (Bristol Business School, University of West of England)

  • Carl Singleton

    (Department of Economics, University of Reading)

  • Alex Bryson

    (Social Research Institute, University College London)

  • John Forth

    (Bayes Business School, City, University of London)

  • Felix Ritchie

    (Bristol Business School, University of West of England)

  • Lucy Stokes

    (National Institute of Economic and Social Research (NIESR))

  • Damian Whittard

    (Bristol Business School, University of West of England)

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.

Suggested Citation

  • 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.
  • Handle: RePEc:rdg:emxxdp:em-dp2023-16
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    References listed on IDEAS

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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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