[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/920.html
   My bibliography  Save this paper

The Role of the Workplace in Ethnic Wage Differentials

Author

Listed:
  • Forth, John
  • Theodoropoulos, Nikolaos
  • Bryson, Alex
Abstract
Using matched employer-employee data for Britain, we examine ethnic wage differentials among full-time employees. We find substantial ethnic segregation across workplaces: around three-fifths of workplaces in Britain employ no ethnic minority workers. However, this workplace segregation does not contribute to the aggregate wage gap between ethnic minorities and white employees. Instead, most of the ethnic wage gap exists between observationally equivalent co-workers. Lower pay satisfaction and higher levels of skill mismatch among ethnic minority workers are consistent with discrimination in wage-setting on the part of employers. The use of job evaluation schemes within the workplace is shown to be associated with a smaller ethnic wage gap.

Suggested Citation

  • Forth, John & Theodoropoulos, Nikolaos & Bryson, Alex, 2021. "The Role of the Workplace in Ethnic Wage Differentials," GLO Discussion Paper Series 920, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:920
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/238740/1/GLO-DP-0920.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Giulia Faggio & Kjell G. Salvanes & John Van Reenen, 2010. "The evolution of inequality in productivity and wages: panel data evidence," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1919-1951, December.
    2. Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, August.
    3. Jae Song & David J Price & Fatih Guvenen & Nicholas Bloom & Till von Wachter, 2019. "Firming Up Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 1-50.
    4. Jonah B. Gelbach, 2016. "When Do Covariates Matter? And Which Ones, and How Much?," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 509-543.
    5. Barry T. Hirsch & David A. Macpherson, 2004. "Wages, Sorting on Skill, and the Racial Composition of Jobs," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 189-210, January.
    6. Emily Oster, 2019. "Unobservable Selection and Coefficient Stability: Theory and Evidence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 187-204, April.
    7. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    8. Yankow, Jeffrey J., 2006. "Why do cities pay more? An empirical examination of some competing theories of the urban wage premium," Journal of Urban Economics, Elsevier, vol. 60(2), pages 139-161, September.
    9. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
    10. Carrington, William J & Troske, Kenneth R, 1998. "Interfirm Segregation and the Black/White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 231-260, April.
    11. Clark, Andrew E., 1997. "Job satisfaction and gender: Why are women so happy at work?," Labour Economics, Elsevier, vol. 4(4), pages 341-372, December.
    12. Mario L. Small & Devah Pager, 2020. "Sociological Perspectives on Racial Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 49-67, Spring.
    13. Lindley, Joanne, 2009. "The over-education of UK immigrants and minority ethnic groups: Evidence from the Labour Force Survey," Economics of Education Review, Elsevier, vol. 28(1), pages 80-89, February.
    14. D.H. Blackaby & D.G. Leslie & P.D. Murphy, 2002. "White-ethnic minority earnings and employment differentials in Britain: evidence from the LFS," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 270-297, April.
    15. Patrick Kline & Evan K Rose & Christopher R Walters, 2022. "Systemic Discrimination Among Large U.S. Employers [“Teachers and Student Achievement in the Chicago Public High Schools,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(4), pages 1963-2036.
    16. Derek Neal, 2004. "The Measured Black-White Wage Gap among Women Is Too Small," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 1-28, February.
    17. repec:eee:labchp:v:1:y:1986:i:c:p:641-692 is not listed on IDEAS
    18. Pendakur, Krishna & Woodcock, Simon, 2010. "Glass Ceilings or Glass Doors? Wage Disparity Within and Between Firms," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 181-189.
    19. Chen, Shih-Neng & Orazem, Peter F. & Mattila, J. Peter & Greig, Jeffrey J., 1999. "Measurement Error in Job Evaluation and the Gender Wage Gap," ISU General Staff Papers 199904010800001335, Iowa State University, Department of Economics.
    20. Emma Duchini & Stefania Simion & Arthur Turrell & Jack Blundell, 2020. "Pay Transparency and Gender Equality," Papers 2006.16099, arXiv.org, revised Dec 2022.
    21. Laura Giuliano & David I. Levine & Jonathan Leonard, 2011. "Racial Bias in the Manager-Employee Relationship: An Analysis of Quits, Dismissals, and Promotions at a Large Retail Firm," Journal of Human Resources, University of Wisconsin Press, vol. 46(1), pages 26-52.
    22. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    23. Daniel Schaefer & Carl Singleton, 2017. "Recent Changes in British Wage Inequality: Evidence from Firms and Occupations," 2017 Meeting Papers 459, Society for Economic Dynamics.
    24. François Gerard & Lorenzo Lagos & Edson Severnini & David Card, 2021. "Assortative Matching or Exclusionary Hiring? The Impact of Employment and Pay Policies on Racial Wage Differences in Brazil," American Economic Review, American Economic Association, vol. 111(10), pages 3418-3457, October.
    25. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    26. Mark B. Stewart, 1983. "On Least Squares Estimation when the Dependent Variable is Grouped," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 737-753.
    27. Chen, Shih-Neng, et al, 1999. "Measurement Error in Job Evaluation and the Gender Wage Gap," Economic Inquiry, Western Economic Association International, vol. 37(2), pages 181-194, April.
    28. Duchini, Emma & Simion, Stefania & Turrell, Arthur, 2020. "Pay Transparency and Cracks in the Glass Ceiling," The Warwick Economics Research Paper Series (TWERPS) 1311, University of Warwick, Department of Economics.
    29. Christian Dustmann & Nikolaos Theodoropoulos, 2010. "Ethnic minority immigrants and their children in Britain," Oxford Economic Papers, Oxford University Press, vol. 62(2), pages 209-233, April.
    30. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
    31. Kenneth R. Troske, 1999. "Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 15-26, February.
    32. Alex Bryson & John Forth & Lucy Stokes, 2018. "The Performance Pay Premium and Wage Dispersion in Britain," Manchester School, University of Manchester, vol. 86(2), pages 139-154, March.
    33. Amadxarif, Zahid & Angeli, Marilena & Haldane, Andrew G & Zemaityte, Gabija, 2020. "Understanding pay gaps," Bank of England working papers 877, Bank of England.
    34. Karen Mumford & Peter N. Smith, 2007. "The Gender Earnings Gap In Britain: Including The Workplace," Manchester School, University of Manchester, vol. 75(6), pages 653-672, December.
    35. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, July.
    36. Abdurrahman Aydemir & Mikal Skuterud, 2008. "The Immigrant Wage Differential within and across Establishments," ILR Review, Cornell University, ILR School, vol. 61(3), pages 334-352, April.
    37. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    38. Jack Blundell, 2021. "Wage responses to gender pay gap reporting requirements," CEP Discussion Papers dp1750, Centre for Economic Performance, LSE.
    39. Barry T. Hirsch & Edward J. Schumacher, 1992. "Labor Earnings, Discrimination, and the Racial Composition of Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 602-628.
    40. James F. Ragan & Carol Horton Tremblay, 1988. "Testing for Employee Discrimination by Race and Sex," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 123-137.
    41. Joni Hersch, 2008. "Profiling the New Immigrant Worker: The Effects of Skin Color and Height," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 345-386, April.
    42. Metcalf, David & Hansen, Kirstine & Charlwood, Andy, 2001. "Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay," National Institute Economic Review, National Institute of Economic and Social Research, vol. 176, pages 61-75, April.
    43. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, December.
    44. Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2021. "Hierarchy and the Employer Size Effect on Wages: Evidence from Britain," Economica, London School of Economics and Political Science, vol. 88(351), pages 671-696, July.
    45. Erling Barth & Alex Bryson & James C. Davis & Richard Freeman, 2016. "It's Where You Work: Increases in the Dispersion of Earnings across Establishments and Individuals in the United States," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 67-97.
    46. Edmans, Alex, 2011. "Does the stock market fully value intangibles? Employee satisfaction and equity prices," Journal of Financial Economics, Elsevier, vol. 101(3), pages 621-640, September.
    47. Deborah M. Figart, 2000. "Equal Pay for Equal Work: The Role of Job Evaluation in an Evolving Social Norm," Journal of Economic Issues, Taylor & Francis Journals, vol. 34(1), pages 1-19, March.
    48. Blundell, Jack, 2021. "Wage responses to gender pay gap reporting requirements," LSE Research Online Documents on Economics 114416, London School of Economics and Political Science, LSE Library.
    49. Alan Manning & Rebecca Rose, 2021. "Ethnic minorities and the UK labour market," CentrePiece - The magazine for economic performance 603, Centre for Economic Performance, LSE.
    50. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    51. Nikolaos Theodoropoulos & John Forth & Alex Bryson, 2022. "Are Women Doing It for Themselves? Female Managers and the Gender Wage Gap," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(6), pages 1329-1355, December.
    52. Simonetta Longhi, 2020. "Does geographical location matter for ethnic wage gaps?," Journal of Regional Science, Wiley Blackwell, vol. 60(3), pages 538-557, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dave Maré, 2022. "Pay gaps – an $18 billion a year issue," Working Papers 22_45, Motu Economic and Public Policy Research.
    2. Phan, Van & Singleton, Carl & Bryson, Alex & Forth, John & Ritchie, Felix & Stokes, Lucy & Whittard, Damian, 2022. "Accounting for Firms in Ethnicity Wage Gaps throughout the Earnings Distribution," IZA Discussion Papers 15284, Institute of Labor Economics (IZA).
    3. Kaya, Ezgi, 2024. "Labour Market Performance of Immigrants: New Evidence from Linked Administrative Data," GLO Discussion Paper Series 1418, Global Labor Organization (GLO).
    4. Mark Williams & Senhu Wang & Maria Koumenta, 2024. "Ethnicity disparities in job control in the United Kingdom," Industrial Relations Journal, Wiley Blackwell, vol. 55(1), pages 33-53, January.
    5. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," GLO Discussion Paper Series 1110, Global Labor Organization (GLO).
    6. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," IZA Discussion Papers 15357, Institute of Labor Economics (IZA).
    2. Sarah Louise Jewell & Giovanni Razzu & Carl Singleton, 2020. "Who Works for Whom and the UK Gender Pay Gap," British Journal of Industrial Relations, London School of Economics, vol. 58(1), pages 50-81, March.
    3. Frijters, Paul & Shields, Michael A. & Theodoropoulos, Nikolaos & Wheatley Price, Stephen, 2003. "Testing for Employee Discrimination Using Matched Employer-Employee Data: Theory and Evidence," IZA Discussion Papers 807, Institute of Labor Economics (IZA).
    4. Paul Frijters & Michael A. Shields & Stephen Wheatley Price & Nikolaos Theodoropoulos, 2006. "Testing for Employee Discrimination in Britain using Matched Employer-Employee Data," University of Cyprus Working Papers in Economics 8-2006, University of Cyprus Department of Economics.
    5. 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.
    6. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    7. Phan, Van & Singleton, Carl & Bryson, Alex & Forth, John & Ritchie, Felix & Stokes, Lucy & Whittard, Damian, 2022. "Accounting for Firms in Ethnicity Wage Gaps throughout the Earnings Distribution," IZA Discussion Papers 15284, Institute of Labor Economics (IZA).
    8. Melanie Jones & Ezgi Kaya, 2023. "The UK gender pay gap: Does firm size matter?," Economica, London School of Economics and Political Science, vol. 90(359), pages 937-952, July.
    9. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
    10. Bana, Sarah & Bedard, Kelly & Rossin-Slater, Maya & Stearns, Jenna, 2023. "Unequal use of social insurance benefits: The role of employers," Journal of Econometrics, Elsevier, vol. 233(2), pages 633-660.
    11. Arellano-Bover, Jaime & San, Shmuel, 2023. "The Role of Firms and Job Mobility in the Assimilation of Immigrants: Former Soviet Union Jews in Israel 1990–2019," IZA Discussion Papers 16389, Institute of Labor Economics (IZA).
    12. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    13. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    14. Luca Flabbi & Mario Macis & Andrea Moro & Fabiano Schivardi, 2019. "Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance," The Economic Journal, Royal Economic Society, vol. 129(622), pages 2390-2423.
    15. Niklas Engbom & Christian Moser, 2022. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," American Economic Review, American Economic Association, vol. 112(12), pages 3803-3847, December.
    16. Daniel Baumgarten & Gabriel Felbermayr & Sybille Lehwald, 2020. "Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 85-122, January.
    17. Magda, Iga & Gromadzki, Jan & Moriconi, Simone, 2021. "Firms and wage inequality in Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 499-552.
    18. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    19. Yannick Bormans & Angelos Theodorakopoulos, 2023. "Productivity dispersion, wage dispersion and superstar firms," Economica, London School of Economics and Political Science, vol. 90(360), pages 1145-1172, October.
    20. Demirci, Murat & Kırdar, Murat Güray, 2023. "The labor market integration of Syrian refugees in Turkey," World Development, Elsevier, vol. 162(C).

    More about this item

    Keywords

    ethnic wage gap; workplace segregation; skill mismatch; pay satisfaction; job evaluation;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.