IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Testing for Employee Discrimination in Britain using Matched Employer-Employee Data

Listed author(s):
  • Paul Frijters
  • Michael A. Shields
  • Stephen Wheatley Price
  • Nikolaos Theodoropoulos

We use recent matched employer-employee data to directly test if white workers have a taste for racial discrimination in Britain. We formally introduce individual and firm heterogeneity into the discrimination model used by Becker (1957, 1971) which we extend to generate predictions consistent with an employee taste for discrimination. We argue firstly that white employees with a taste for discrimination should report lower levels of job satisfaction the larger the proportion of ethnic minorities at their workplace. Secondly, white employees would have to be compensated by higher wages if required to work alongside ethnic minority co-workers. Both hypotheses are clearly supported for white males in our data, after comprehensively controlling for individual, job, and workplace characteristics. The white male wage premium for working amongst only ethnic minority co-workers, as compared to working only with whites, is about 12%. Importantly, it appears that neither of these effects operates via realised racial prejudice at the workplace or white employees' feelings concerning their job security.

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/0608.pdf
Download Restriction: no

Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 8-2006.

as
in new window

Length: 40 pages
Date of creation: Sep 2006
Handle: RePEc:ucy:cypeua:8-2006
Contact details of provider: Web page: http://www.ucy.ac.cy/econ/en

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. Francis Green & Nicholas Tsitsianis, 2004. "Can the Changing Nature of Jobs Account for National Trends in Job Satisfaction?," Studies in Economics 0406, School of Economics, University of Kent.
  2. Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, August.
  3. Freeman, Richard B, 1978. "Job Satisfaction as an Economic Variable," American Economic Review, American Economic Association, vol. 68(2), pages 135-141, May.
  4. Daniel S. Hamermesh, 2001. "The Changing Distribution of Job Satisfaction," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 1-30.
  5. Kevin Lang, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 363-382.
  6. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
  7. Shields, Michael A. & Ward, Melanie, 2001. "Improving nurse retention in the National Health Service in England: the impact of job satisfaction on intentions to quit," Journal of Health Economics, Elsevier, vol. 20(5), pages 677-701, September.
  8. Stewart, Mark B, 1983. "Racial Discrimination and Occupational Attainment in Britain," Economic Journal, Royal Economic Society, vol. 93(371), pages 521-541, September.
  9. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
  10. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February.
  11. 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.
  12. Dustmann Christian & Preston Ian P, 2007. "Racial and Economic Factors in Attitudes to Immigration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-41, November.
  13. Christian Dustmann & Nikolaos Theodoropoulos, 2010. "Ethnic minority immigrants and their children in Britain," Oxford Economic Papers, Oxford University Press, vol. 62(2), pages 209-233, April.
  14. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, April.
  15. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, vol. 112(483), pages 480-518, November.
  16. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
  17. Frijters, P., 1998. "Discrimination and job-uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 36(4), pages 433-446, September.
  18. Michael A. Shields & Stephen Wheatley Price, 2002. "The Determinants of Racial Harassment at the Workplace: Evidence from the British Nursing Profession," British Journal of Industrial Relations, London School of Economics, vol. 40(1), pages 1-21, 03.
  19. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  20. Pudney, Stephen & Shields, Michael A, 2000. " Gender and Racial Discrimination in Pay and Promotion for NHS Nurses," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 801-835, Special I.
  21. Shields, Michael A & Price, Stephen Wheatley, 2002. "Racial Harassment, Job Satisfaction and Intentions to Quit: Evidence from the British Nursing Profession," Economica, London School of Economics and Political Science, vol. 69(274), pages 295-226, May.
  22. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
  23. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
  24. Richard Breen & Cecilia Garcia-Penalosa, 2002. "Bayesian Learning and Gender Segregation," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 899-922, October.
  25. Buffum, David & Whaples, Robert, 1995. "Fear and Lathing in the Michigan Furniture Industry: Employee-Based Discrimination a Century Ago," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 234-252, April.
  26. Rosen, Asa, 1997. "An equilibrium search-matching model of discrimination," European Economic Review, Elsevier, vol. 41(8), pages 1589-1613, August.
  27. Andrew E. Clark, 1996. "Job Satisfaction in Britain," British Journal of Industrial Relations, London School of Economics, vol. 34(2), pages 189-217, 06.
  28. Dustmann, Christian & Preston, Ian, 2001. "Attitudes to Ethic Minorities, Ethnic Context and Location Decisions," Economic Journal, Royal Economic Society, vol. 111(470), pages 353-373, April.
  29. Ward, Melanie E & Sloane, Peter J, 2000. "Non-pecuniary Advantages versus Pecuniary Disadvantages; Job Satisfaction among Male and Female Academics in Scottish Universities," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(3), pages 273-303, August.
  30. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
  31. Carrington, William J & Troske, Kenneth R, 1998. "Interfirm Segregation and the Black/White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 231-260, April.
  32. David N. Laband & Bernard F. Lentz, 1998. "The Effects of Sexual Harassment on Job Satisfaction, Earnings, and Turnover among Female Lawyers," ILR Review, Cornell University, ILR School, vol. 51(4), pages 594-607, July.
  33. Michael E. Gordon & Angelo S. Denisi, 1995. "A Re-Examination of the Relationship between Union Membership and Job Satisfaction," ILR Review, Cornell University, ILR School, vol. 48(2), pages 222-236, January.
  34. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
  35. James J. Heckman, 1998. "Detecting Discrimination," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 101-116, Spring.
  36. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 49-89.
  37. Lazear, Edward P & Rosen, Sherwin, 1990. "Male-Female Wage Differentials in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 106-123, January.
  38. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
  39. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
  40. Hwang, Hae-shin & Reed, W Robert & Hubbard, Carlton, 1992. "Compensating Wage Differentials and Unobserved Productivity," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 835-858, August.
  41. 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.
  42. Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
  43. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
  44. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  45. Barry T. Hirsch & Edward J. Schumacher, 1992. "Labor Earnings, Discrimination, and the Racial Composition of Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 602-628.
  46. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
  47. Stephen Pudney & Nikolaos Theodoropoulos, 2006. "Firm-Specific Gender and Ethnicity Pay Differentials in Britain," University of Cyprus Working Papers in Economics 9-2006, University of Cyprus Department of Economics.
  48. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
  49. John S. Heywood & W. S. Siebert & Xiangdong Wei, 2002. "Worker Sorting and Job Satisfaction: The Case of Union and Government Jobs," ILR Review, Cornell University, ILR School, vol. 55(4), pages 595-609, July.
  50. James F. Ragan & Carol Horton Tremblay, 1988. "Testing for Employee Discrimination by Race and Sex," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 123-137.
  51. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
  52. Chiswick, Barry R, 1973. "Racial Discrimination in the Labor Market: A Test of Alternative Hypotheses," Journal of Political Economy, University of Chicago Press, vol. 81(6), pages 1330-1352, Nov.-Dec..
  53. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:ucy:cypeua:8-2006. 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.