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Performance Pay and Ethnic Wage Differences in Britain

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  • Colin P. Green
  • John S. Heywood
  • Nikolaos Theodoropoulos

Abstract

In the first study using British data, we show that the average wage advantage of holding a performance pay job is greater for minorities than that for Whites. This generates a smaller ethnic wage gap among performance pay jobs than among time rate jobs. Yet, this pattern is driven by those receiving bonuses not those receiving performance related pay and it is evident only for Asians and for those in managerial jobs. Moreover, it is partially driven by sorting in which the more able take bonus jobs. Nonetheless, the basic results persist with diminished magnitude in fixed effect estimates. These findings differ dramatically from those for United States in which bonuses appear to increase racial differentials especially at the top of the earnings distribution.

Suggested Citation

  • Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2012. "Performance Pay and Ethnic Wage Differences in Britain," University of Cyprus Working Papers in Economics 06-2012, University of Cyprus Department of Economics.
    • Handle: RePEc:ucy:cypeua:06-2012
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    References listed on IDEAS

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    1. A benefit of performance pay
      by chris dillow in Stumbling and Mumbling on 2012-05-29 18:43:17

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    Cited by:

    1. Chiang, Hui-Yu & Ohtake, Fumio, 2014. "Performance-pay and the gender wage gap in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 71-88.

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    Keywords

    Performance Pay; Ethnic Earnings Differentials;

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