1. Ethnic Penalties in the Labour Market: The Public-Private Sector Divide Sin Yi Cheung Oxford Brookes University Anthony Heath University of Oxford

2. 2 Ethnic Penalties in the labour market – Why should we care? Ethnic minority population continues to rise: 8% in 2001 from 5.5% in 1991. the proportion of under 16 is 38% for the Bangladeshi, twice as much as compared to the whites Unemployment rates for some groups (e.g. Pakistani, Bangladeshi, Black Caribbean, Black African) are twice or three times as high as the white British Less likely to access salaried jobs Reproduction of disadvantage: the current school-age ethnic minorities may become a new generation of jobless and/or under- employed young people.

3. 3 Sector of employment 75% of the workforce is in the private sector Organizations and firms in the private sector are less likely to adopt measures to promote equality of opportunity Greater reliance on formal and more bureaucratised procedures in recruitment and promotion in the public sector

4. 4 Data and Analysis Data 1% Sample of Anonymised Records (SARs) of Census 2001 Labour Force Survey (LFS) 2001-2004 British Social Attitudes Survey (BSA) 2001- 2003 Analysis Binary logistic regression models of occupational attainment – access to the salariat (managerial and professional jobs) OLS linear regressions of logged hourly earnings Separate models for men and women

5. 5 Measures Ethnicity: black African black Caribbean black mixed ancestry (white and Caribbean; white and African) Indian Pakistani Bangladeshi Chinese British, other whites

6. 6 Measures Sector: public vs private Industry: Manufacturing Distribution, hotel and restaurant Transport and communication Banking and finance Public Admin, education and health

7. 7 Proportion of ethnic groups employed in the private sector (LFS 2001-04)

8. 8 Occupational levels of whites/ ethnic minorities in public and private sectors: male employees

9. 9 Occupational levels of whites/ ethnic minorities in public and private sectors: female employees

10. 10 Ethnic representation in the private sector Ethnic minorities are under- represented in banking and finance High concentration of ethnic minorities in certain industries: hotel, retail and catering; personal services sector Over-represented in the secondary labour market: low-skilled, low-wage, low job security, no/low fringe benefits (this could be due to low human capital)

11. 11 Sectoral Choice – working in the private sector

12. 12 Ethnic Penalties Estimates of the extent to which ethnic minorities are disadvantaged in comparison with people belonging to the charter (majority white) population who have the same age, educational qualification, and marital status While the ethnic penalties calculated from statistical models of unemployment, occupation and earnings must not be equated directly with discrimination, there is considerable evidence that unequal treatment on grounds of race or colour is likely to be a major factor underlying the pattern of ethnic penalties.

13. 13 Access to Salaried Jobs by Sector - men

14. 14 Access to Salaried Jobs by Sector - women

15. 15 Logged-hourly earnings by Sector – men (LFS 2001-04)

16. 16 Logged-hourly earnings by Sector – women (LFS 2001-04)

17. 17 The Warmth of the Welcome Discrimination by employers may make it harder to obtain jobs in a particular sector or industry Prejudice of white co-workers in certain sectors may make working conditions unpleasant The chilled factor in N Ireland

18. 18 Self-reported prejudice: white employees and employers % very or fairly prejudiced

19. 19 Self-reported prejudice: white employers and managers % very or fairly prejudiced

20. 20 Clear divide between sectors Within the private sector there is a clear pattern for ethnic minorities to be under- represented in professional and managerial occupations. Ethnic minority men also tend to have lower earnings than whites in the private sector. These patterns are not so marked for women and are not found in the public sector, where ethnic penalties tend to be markedly lower than in the private sector.

21. 21 Similar patterns within certain industries Within broad industrial groupings, occupational patterns and ethnic penalties parallel those found in the public and private sectors. The public administration, education and health grouping overlaps to a large extent with the public sector, and thus the pattern of ethnic penalties is very similar. There are similar and substantial ethnic penalties in all four of the larger industrial groupings of manufacturing, distribution, transport and banking.

22. 22 Policy Implications Discrimination may not be the whole story but an important part of the explanation Striking parallel between higher levels of ethnic penalties and self-reported prejudice in the private sector Possibly extend the Race Relations (Amendment) Act to the private sector, or initially to large firms who have won public sector contracts Affirmative action like those in N Ireland: religious monitoring (long-standing enforcement) has been effective in reducing labour market disadvantage of the Catholics