The role of the workplace in ethnic wage differentials |
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Authors: | John Forth Nikolaos Theodoropoulos Alex Bryson |
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Affiliation: | 1. Faculty of Management, Bayes Business School, City, University of London, London, UK;2. Department of Economics, University of Cyprus, Nicosia, Cyprus;3. Social Research Institute, University College London, London, UK |
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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. |
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