Mind The Gap! Pay, Gender, and Ethnicity in the United Kingdom

Abstract: Despite many years of progress towards closing the gender pay gap and achieving racial equality, women from ethnic minority groups in the United Kingdom earn less compared to their male counterparts and to the population average. The extent of channelling into certain areas of occupation and employment are a prominent feature of the employment of minority groups in the UK and is a key mechanism investigated in this study. This study therefore uses micro-level data from the Annual Population Survey 2018 in a linear regression to explain the extent to which occupational segregation explains the adjusted pay gap. In this way, accounting for observable factors that contribute to pay penalties pertains to a discussion of double disadvantage. The aim of this study therefore is to measure the pay differentials faced by ethnic minority groups, and whether a double disadvantage occurs for women of ethnic minority backgrounds. The study finds that while occupational segregation explains some of the pay differential, albeit varying in degree by each ethnic minority group, much is left unexplained. Thus, the mechanisms behind the gender ethnicity pay gap align with occupational segregation, but so too with unexplained factors, where discrimination and disadvantage play a role. Additionally, the study finds that relative to white male pay, ethnic minority men face a greater pay disadvantage relative to their female counterparts, and thus according to this study, ethnic minority women face no double disadvantage.