The Role of the Workplace in Ethnic Wage Differentials

Earnings Discrimination in the Workplace

“…Similar studies have been undertaken for Canada by Pendakur and Woodcock (2010) and for Britain by Forth et al (2021). In common with the US evidence for blacks, Forth et al (2021) find that ethnic minorities in Britain tend to be over-represented in higher-paying workplaces -a feature that is most evident for women.…”

“…Similar studies have been undertaken for Canada by Pendakur and Woodcock (2010) and for Britain by Forth et al (2021). In common with the US evidence for blacks, Forth et al (2021) find that ethnic minorities in Britain tend to be over-represented in higher-paying workplaces -a feature that is most evident for women. Non-white male employees then earn, on average, around nine per cent less than observationally equivalent white employees after accounting for wage differences across workplaces.…”

“…Each of these may act as incentives for the firm to seek out and address the origins of wage inequality among its employees. Since much of the ethnic wage gap exists within workplaces rather than between workplaces (Forth et al, 2021), extending the policy to ethnicity may bring rewards. Although ethnic pay gap reporting has been discussed in UK, it faces challenges because anonymity is more difficult.…”

Accounting for Firms in Ethnicity Wage Gaps Throughout the Earnings Distribution

“…Carrington and Troske (1998) found that within-plant racial wage gaps are generally accounted for by observed characteristics, such as education or experience, but a significant component (around five percentage points for men and around two percentage points for women) remained on average unaccounted for. Forth et al (2021) is the only study for Britain that has used linked employer-employee data (the Workplace Employment Relations Survey, for 1998Survey, for , 2004Survey, for and 2011 to examine ethnicity wage differences within workplaces. Although they identified substantial ethnic segregation of employees across workplaces, Forth et al (2021) concluded that average ethnicity wage gaps in Britain predominantly occur within workplaces, rather than between workplaces, suggesting that the sorting of ethnicities across employers does not appear to play a large role in accounting for these gaps.…”

“…Forth et al (2021) is the only study for Britain that has used linked employer-employee data (the Workplace Employment Relations Survey, for 1998Survey, for , 2004Survey, for and 2011 to examine ethnicity wage differences within workplaces. Although they identified substantial ethnic segregation of employees across workplaces, Forth et al (2021) concluded that average ethnicity wage gaps in Britain predominantly occur within workplaces, rather than between workplaces, suggesting that the sorting of ethnicities across employers does not appear to play a large role in accounting for these gaps. This might occur if, for example, employers discriminate based on race in the pay of new hires or in the promotion of employees, either statistically or on grounds of taste.…”