A reconsideration of ethnic penalties in inactivity and unemployment: a study of second generation men and women in England and Wales

Zuccotti, C.V. & Platt, L. (2016) ISA RC28 Summer Meeting, University of Bern, Switzerland, 29 - 31 August 2016 [ONS LS]

Other information:
Abstract:

Background and rationale
Ethnic inequalities facing the children of immigrants are a central concern for both researchers and governments across much of Europe. Particular attention has been paid to labour market disadvantage and to inequalities in educational attainment (Heath and Cheung 2006; Heath and Brinbaum 2014). Second generation ethnic minorities have typically shown substantial improvements over time, particularly relative to the first generation. Research in the UK shows that ethnic minorities are able to achieve relatively high educational outcomes even from low socio-economic backgrounds, by contrast with their majority group peers (Crawford and Greaves, 2015; Burgess 2014). Such educational mobility has enabled ethnic minorities to improve their labour market outcomes (Khattab, 2012; Platt, 2007; Zuccotti, 2015), especially when compared to their parents. However, while gaps are closing in terms of occupational outcomes, substantial differences in unemployment remain; and gaps in employment rates are arguably a greater challenge than access to more advantaged social class positions (Equality and Human Rights Commission, 2015; Hills, 2010). Specifically, Pakistani, Bangladeshi and Caribbean populations often have lower employment probabilities than the White British, even at the same levels of educational attainment (Cheung and Heath, 2007; Rafferty, 2012).

One of the key explanations behind these so-called ‘ethnic gaps’ has been discrimination in the labour market (Heath and Cheung, 2006; Kingston et al., 2015; McGinnity and Lunn, 2011). Although we cannot know to what extent the ‘ethnic gap’ in terms of employment found in quantitative studies can be explained by discrimination, employer discrimination seems to be a robust finding in the literature. However, we argue that this might not be the whole story. Ethnic minorities have overwhelmingly poor social origins and are much more likely to have experienced workless families as children. We know that this can have negative effects on individuals’ employment and labour market participation in general, as well as on their ability to translate higher educational attainment into labour market success (Machin et al. 2009). Existing research is increasingly turning to family background to help understand occupational differences between ethnic groups. A recent study for the UK showed that part (or in some cases all) of the explanation for ethnic penalties in occupation can be attributed to the relatively poorer socio-economic background in which ethnic minorities are raised (Zuccotti, 2015a, 2015b). However, family background has only rarely been used to help understand differences in unemployment (Platt 2005).

We therefore investigate the role of family background and family resources in accounting for unemployment gaps between white British and second generation ethnic minorities in the UK. In addition, for women, we also study inactivity, since this arguably represents a form of ‘hidden unemployment’, or may indicate an alternative form of disadvantage, particularly given the substantial variations across ethnic groups.

Data and measures
We use the ONS Longitudinal Study (ONS-LS), a unique dataset that links census records for a 1 per cent sample of the population of England and Wales across five successive censuses (1971, 1981, 1991, 2001 and 2011). This prospective study allows us to measure individuals’ family resources when they were children living with immigrant parents in England & Wales, and link these with their employment outcomes as adults. Family resources are operationalised as parental social class and employment status, and material resources, such as car ownership. Furthermore, by linking information on where families lived when the ONS-LS members were children to measures of area deprivation, we are also able to construct measures of neighbourhood context (disadvantage). Neighbourhoods of upbringing are often argued to be relevant for social mobility (Chetty et al. 2014) and children’s educational and economic outcomes (Sampson 2008); but, again, are rarely considered in attempts to identify influences on contemporary labour market inequalities across ethnic groups.

Using pooled samples of around 150,000 men and women, we estimate a series of linear probabilities models to ascertain: a) the extent to which Indian, Pakistani, Bangladeshi, Chinese, Black Caribbean, Black African and White British ethnic groups face differential unemployment risks; b) how far those unemployment gaps are explained or exacerbated by taking account of educational attainment; and c) the role of family background and childhood neighbourhood context in attempting to account for such ethnic penalties. Finally, we investigate the extent to which ethnic penalties differ according to level of achieved education. We estimate separate models for men and women and we adjust our estimates for repeat observations on individuals. We also subject our estimates to a range of robustness checks.

Results
We show that, net of educational attainment, Pakistani and Caribbean men are around 6% more likely to be unemployed than white British men; this penalty reduces by half once we control for social background and origin neighbourhood deprivation. Some unexplained gaps thus remain. Among women, social origins also play a role in explaining some of the penalties for both unemployment and inactivity. It is also notable that while Caribbean women have higher rates of activity – even net of education and family background – than their white majority counterparts, they face substantial higher unemployment rates.

The results also show that among those with a university degree, most ethnic minority male groups are equally or even less likely to be unemployed compared to their white British counterparts. Although higher returns to education have been previously found among ethnic minorities (Heath2007), such ‘positive gaps’ remain a novelty in these type of studies. Higher education also considerably reduces the penalty found for inactivity and unemployment for Pakistani and Bangladeshi women.

We conclude that taking account of childhood family context provides new insight into the substantial unemployment risks faced by a number of minority ethnic groups. We also identify the protective role of higher education, even given disadvantaged backgrounds, as an area for further research.

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Output from project: 04010030

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