Ethnic minorities in the labour market: dynamics and diversity

Ken Clark and Stephen Drinkwater

A study of how Britain’s ethnic minorities are performing in the labour market, looking in detail at the diverse experiences of different ethnic minorities.

This study looks in detail at the diverse experiences of different ethnic minorities, drawing on information from the 1991 and 2001 Censuses and more recent data from the Labour Force Survey. It examines differences between the experiences of men and women, and focuses on three main labour market outcomes:

  • employment rates (excluding students) – a key factor in determining individual and household welfare;
  • self-employment rates – self-employment is an important form of economic activity for many men from ethnic minorities in Britain;
  • occupational attainment and earnings – what happens to individual from ethnic minorities once they have found jobs.

The authors find that, despite an improvement in labour market performance for some ethnic minorities, there are still substantial differences between the employment and earnings of white people and some other ethnic groups.

Summary

Summary

This research examines the labour market performance of Britain’s ethnic minorities. In particular, it emphasises the diversity of their experience and the dynamic change in the relative positions of ethnic groups between 1991 and 2001. While some groups have improved their labour market position relative to white people, substantial disadvantage remains, both in access to jobs and in earnings once in employment. The study, by Ken Clark of the University of Manchester and Stephen Drinkwater of the University of Surrey, found:

  • Employment rates increased most for Black African, Pakistani and Bangladeshi men, largely due to improvements in their educational attainment. However, substantial employment gaps remain for Black African, Black Caribbean, Pakistani and Bangladeshi men. Women from ethnic minority backgrounds did not close the employment gap with white women to the same extent as ethnic minority men and the employment rates of Pakistani and Bangladeshi women remain very low, at less than 30 per cent.
  • Educational qualifications improved job prospects for everyone, but this effect was particularly pronounced for ethnic minorities. Thus, investment in education for these groups promises a high return in employment terms.
  • Living in a deprived area reduced employment prospects. While this is unsurprising, the effect was larger for ethnic minorities.
  • Self-employment rates, which are traditionally high for some ethnic groups, fell for Chinese and Indian people. This appears to be due to the greater paid employment prospects of British-born members of these groups. In contrast, self-employment rates remained largely unchanged for Pakistani and Bangladeshi men; furthermore their self-employment was highly concentrated in certain sectors such as retail, restaurants/takeaways and taxi-driving.
  • In paid work, there was an improvement in the occupational attainment (or social class) of most ethnic groups. This is predominantly explained by higher levels of education. However, there was evidence that some ethnic minority graduates, particularly women, were finding it harder to gain higher-level positions.
  • Individuals from all ethnic minorities earned less on average than white people, but the differences were smaller for women than for men. Earnings deficits were highest in professional and managerial occupations.
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