Advanced Search
MyIDEAS: Login

Firm-Specific Gender and Ethnicity Pay Differentials in Britain

Contents:

Author Info

  • Stephen Pudney
  • Nikolaos Theodoropoulos

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

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/0609.pdf
Download Restriction: no

Bibliographic Info

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

as in new window
Length: 35 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:ucy:cypeua:9-2006

Contact details of provider:
Web page: http://www.econ.ucy.ac.cy

Related research

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

References

References listed on IDEAS
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.:
as in new window
  1. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High-Wage Workers and High-Wage Firms," CIRANO Working Papers 94s-23, CIRANO.
  2. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1996. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," NBER Working Papers 5626, National Bureau of Economic Research, Inc.
  3. Kevin Lang & Michael Manove, 2006. "Education and Labor-Market Discrimination," NBER Working Papers 12257, National Bureau of Economic Research, Inc.
  4. Christian Dustmann & Nikolaos Theodoropoulos, 2006. "Ethnic Minority Immigrants and their Children in Britain," CReAM Discussion Paper Series 0610, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. Susan Harkness, 1996. "The gender earnings gap: evidence from the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 17(2), pages 1-36, May.
  6. A. R. Cardoso, 2000. "Wage differentials across firms: an application of multilevel modelling," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(4), pages 343-354.
  7. Bronars, Stephen G & Famulari, Melissa, 1997. "Wage, Tenure, and Wage Growth Variation within and across Establishment," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 285-317, April.
  8. Karen Mumford & Peter N Smith, . "The Gender Earnings Gap in Britain," Discussion Papers 04/05, Department of Economics, University of York.
  9. Blau, Francine D & Kahn, Lawrence M, 1996. "Wage Structure and Gender Earnings Differentials: An International Comparison," Economica, London School of Economics and Political Science, vol. 63(250), pages S29-62, Suppl..
  10. Amanda Gosling & Stephen Machin & Costas Meghir, 1994. "The changing distribution of male wages in the UK," IFS Working Papers W94/13, Institute for Fiscal Studies.
  11. Erica L. Groshen, 1987. "The structure of the female/male wage differential: is it who you are, what you do, or where you work?," Working Paper 8708, Federal Reserve Bank of Cleveland.
  12. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-95, October.
  13. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  14. repec:rus:hseeco:9982 is not listed on IDEAS
  15. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
  16. John J. Donohue III & James Heckman, 1991. "Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," NBER Working Papers 3894, National Bureau of Economic Research, Inc.
  17. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
  18. Stephen Pudney & Michael Shields, 2000. "Gender, race, pay and promotion in the British nursing profession: estimation of a generalized ordered probit model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(4), pages 367-399.
  19. 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.
  20. Blanchflower, David G & Oswald, Andrew J & Sanfey, Peter, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 227-51, February.
  21. Blau, Francine D & Ferber, Marianne A, 1987. "Discrimination: Empirical Evidence from the United States," American Economic Review, American Economic Association, vol. 77(2), pages 316-20, May.
  22. Meng, Xin, 2004. "Gender earnings gap: the role of firm specific effects," Labour Economics, Elsevier, vol. 11(5), pages 555-573, October.
  23. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-64, June.
  24. Hellerstein, Judith K. & Neumark, David, 2005. "Using Matched Employer-Employee Data to Study Labor Market Discrimination," IZA Discussion Papers 1555, Institute for the Study of Labor (IZA).
  25. Hamermesh, Daniel S., 1999. "LEEping into the future of labor economics: the research potential of linking employer and employee data," Labour Economics, Elsevier, vol. 6(1), pages 25-41, March.
  26. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, vol. 91(2), pages 145-149, May.
  27. Amitabh Chandra, 2003. "Is the Convergence of the Racial Wage Gap Illusory?," NBER Working Papers 9476, National Bureau of Economic Research, Inc.
  28. David Card & Alan Krueger, 1990. "School Quality and Black/White Relative Earnings: A Direct Assessment," Working Papers 652, Princeton University, Department of Economics, Industrial Relations Section..
  29. Borooah, V K & Lee, K C, 1988. "The Effect of Changes in Britain's Industrial Structure on Female Relative Pay and Employment," Economic Journal, Royal Economic Society, vol. 98(392), pages 818-32, September.
  30. Kenneth R. Troske, 1998. "Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data," Labor and Demography 9807001, EconWPA.
  31. Goldin, Claudia, 2004. "The Long Road to the Fast Track: Career and Family," Scholarly Articles 2920116, Harvard University Department of Economics.
  32. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
  33. Jessica Gordon Nembhard & William Darity, 2000. "Racial and Ethnic Economic Inequality: The International Record," American Economic Review, American Economic Association, vol. 90(2), pages 308-311, May.
  34. Ruud, Paul A., 1984. "Tests of Specification in Econometrics," Department of Economics, Working Paper Series qt4kq8m0hf, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Divide and conquer
    by chris dillow in Stumbling and Mumbling on 2008-03-08 10:10:34
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Paul Frijters & Michael A Shileds & Nikolaos Theodoropoulos & Stephen Wheatley, 2003. "Testing for Employee Discrimination using Matched Employer-Employee Data: Theory and Evidence," School of Economics and Finance Discussion Papers and Working Papers Series 168b, School of Economics and Finance, Queensland University of Technology.
  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.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucy:cypeua:9-2006. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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