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Firm-Specific Gender and Ethnicity Pay Differentials in Britain

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Author Info
Stephen Pudney
Nikolaos Theodoropoulos

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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

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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 9-2006.

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Length: 35 pages
Date of creation: Sep 2006
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Handle: RePEc:ucy:cypeua:9-2006

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Web page: http://www.econ.ucy.ac.cy

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Related research
Keywords: Matched employer-employee data; pay differentials; random effects; semi-parametric finite mixture estimator.;

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References listed on IDEAS
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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 for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. 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. [Downloadable!]
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