What Are The Underlying Causes of Ethnicity Wage Gaps In The United Kingdom
Ethnicity Wage Gaps Dissertation – Racial wage discrimination became illegal in the UK in 1965 with the Race Relations Act, in light of increased immigration after WWII. The law was later strengthened in 1968 and 1976. Yet despite criticism of the legislation in the wake of the Brixton riots of 1981, the inadequacy of labour market protections for ethnic minorities was not addressed until 2010 through the Equality Act. With little recent research into ethnicity pay gaps, unlike gender pay gaps (Metcalf, 2009), and even less research into how they have changed over time, this paper seeks to address this. Recent criticism of economic models by Spriggs (2020), in response to global anti-racism protests, has shown the need for a more objective approach to discrimination research.
Ethnicity pay gaps are just one, among many, expressions of discrimination in modern economies. Pay gaps are where ethnic minorities are paid different amounts (often less) than native workers and can occur in three main ways. Either employees have different characteristics (economically justifying their different wage), employers directly pay minorities a lower wage for the same job, or workers cluster into lower-paying industries.
All three can foster an element of discrimination, and are interlinked. If a job applicant has less education or labour market experience, an employer is legally entitled to pay a lower wage. However, minorities may have less education, for example, because they are not willing to train to work in industries that are perceived to be racist. Over time, this leads to occupational clustering, where minorities are over represented in some industries and under-represented in others. Consequently, pay gaps emerge and are often persistent, with many underlying factors at play, making policy solutions complex even though direct pay discrimination is illegal in the UK.
- 10,000 words – 32 pages in length
- Excellent use of literature
- Excellent analysis of subject area
- Well written throughout
- Ideal for economics and HRM students
1 – Introduction and Theory
Introduction
Theory
Taste Models
Statistical Discrimination and Signalling Models
Entrenchment
Other Causes of Wage Determination
Literature
Gender
Components of the Wage Gap
The Explained Wage Gap
Employment
Policy
2 – Dataset and Initial Analysis
Data Source
Setup
Descriptive Analysis
Descriptive Statistics
Labour Market Outcomes
Raw Wages
3 – Decomposition Analysis
Methodology
Model
Blinder-Oaxaca Decompositions
Decomposition Results
Males
Females
Explained Differences
Males
Females
Trends
Endogeneity
4 – Limitations and Concluding Remarks
Limitations
Future Research
Conclusions
Bibliography
Appendices
