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The role of the workplace in ethnic wage differentials

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  • John Forth
  • Nikolaos Theodoropoulos
  • Alex Bryson

Abstract

Using linked employer–employee data for Britain, we examine ethnic wage differentials among full‐time employees. We find substantial ethnic segregation across workplaces. However, this inter‐workplace segregation does not contribute to the aggregate wage penalty in Britain. Instead, most of the ethnic wage gap exists within the workplace, 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 presence of recognized trade unions and the use of job evaluation schemes within the workplace are associated with a smaller ethnic wage gap. These findings indicate that more attention should be placed on ensuring fairness in wage determination.

Suggested Citation

  • John Forth & Nikolaos Theodoropoulos & Alex Bryson, 2023. "The role of the workplace in ethnic wage differentials," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 259-290, June.
  • Handle: RePEc:bla:brjirl:v:61:y:2023:i:2:p:259-290
    DOI: 10.1111/bjir.12696
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    Cited by:

    1. 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.
    2. Van Phan & Carl Singleton & Alex Bryson & John Forth & Felix Ritchie & Lucy Stokes & Damian Whittard, 2022. "Accounting for firms in ethnicity wage gaps throughout the earnings distribution," Economics Discussion Papers em-dp2022-03, Department of Economics, University of Reading.
    3. 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.
    4. Dave Maré, 2022. "Pay gaps – an $18 billion a year issue," Working Papers 22_45, Motu Economic and Public Policy Research.
    5. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," GLO Discussion Paper Series 1110, Global Labor Organization (GLO).

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    More about this item

    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

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