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Firm-Specific Gender and Ethnicity Pay Differentials in Britain

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  • 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

Suggested Citation

  • 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.
    • Handle: RePEc:ucy:cypeua:9-2006
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    File URL: https://papers.econ.ucy.ac.cy/RePEc/papers/0609.pdf
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    1. Divide and conquer
      by chris dillow in Stumbling and Mumbling on 2008-03-08 16:10:34

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    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 of Labor Economics (IZA).
    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.
    3. Paul Frijters, 2003. "Testing for Employee Discrimination using Matched Employer-Employee Data: Theory and Evidence," Paul Frijters Discussion Papers 2003-1, School of Economics and Finance, Queensland University of Technology.

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