Unemployment and Occupational Attainment of Male Immigrants and Ethnic Minorities in UK

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1 relmnary draft nemployment and Occupatonal Attanment of ale Immgrants and Ethnc nortes n K Sayema H Bdsha 1 January 2008 Abstract: The paper models the labour market experence of mmgrants and of dfferent ethnc groups n the K. We fnd hgh unemployment probabltes for ethnc mnorty Brtsh n recent years whch contrast wth the apparent assmlaton of mmgrants nto wage employment. In terms of occupatonal attanment over tme mmgrants representaton n professonal and hgh skll occupatons has reduced sgnfcantly. Decomposton analyss ndcates the mportance of both explaned as well as unexplaned factors. For certan groups of ethnc mnortes and mmgrants observed attrbutes cannot explan ther less favourable labour market outcomes and our analyss suggests labour market dscrmnaton aganst them. Key Words: Immgrant Ethncty nemployment Occupatonal Attanment Decomposton Analyss JEL Classfcaton: J71 J61 J64 J24 C25 1 School of Economcs nversty of ottngham nversty ark ottngham G7 2RD nted Kngdom emal: lexshb@nottngham.ac.uk

2 1. Introducton It s often argued that n comparson to the ndgenous populaton of a country the mmgrant and the mnorty communty suffers greater level of unemployment and s thought to be under represented n hgh-sklled better pad jobs. Gven the fact that people of dfferent orgn or of dfferent ethnctes may have dfferent attrbutes preferences or ablty ther performance n the labour market could certanly be dfferent from the natves. However n addton to such dfferences there could be certan unexplaned factors relatng solely to ther natonalty or ethncty and n certan cases these factors could have mportant mpacts on ther employablty or occupatonal attanment. In the labour lterature t s often argued that people of a mnorty communty receve unequal treatment and that ths could constran ther earnngs potental and labour market performance to a certan extent. Dependng on the country under consderaton the skll-mx of the mmgrants as well as the tme perod of analyss we could observe dverse outcomes as well. In the context of K t s a well accepted fact that n comparson to the whte Brtsh the ethnc mnorty Brtsh as well as the mmgrants suffer hgher level of unemployment Blackaby et. al and rce 2001 receve lower wages Bell 199 and are under-represented n the hgher stage of occupatonal ladder but more concentrated on the lower stage Borooah 2001 and Carmchael and Wood Anecdotal evdence also suggests wde dversty n labour market experences on the bass of ethncty and country of orgn. However t s not very clear why the mnortes as well as the mmgrants as a whole under performs and why there exsts dfferences amongst the mnortes as well. In addton gven the fact that the K economy has experenced sgnfcant changes n mmgraton polces and skll mx over tme t s plausble that there have been mportant changes n the labour market performance of dfferent groups over tme. Exstng lterature on the labour market experence of the mmgrants or ethnc mnortes of K are prmarly concentrated on explanng the unemployment problem of the mnorty communtes. In ths context rce 2001 uses labour force survey LFS data to analyze unemployment among the whte as well as the non-whte males born both n the K and abroad and fnds hgh unemployment among the 2

3 prme-aged male mmgrants wth wde varatons dependng on country of brth. Blackaby et. al 2002 fnd that as a whole the ethnc mnortes have a 11% worse employment probablty than whtes wth blacks appearng to be the worst sufferers followed by the akstans. Labour market performance however nvolves not only employablty but also the type of occupaton n whch an ndvdual ends up. In ths context research n the K s qute lmted and to our knowledge the work of Borooah 2001 and Carmchael & Wood 2000 are the only exceptons. The latter uses 1994 LFS data of K to analyze the occupatonal status of both males and females n dfferent ethnc groups and fnds that mnortes end up at lower stages n the occupatonal ladder wth black men and Indan women beng n the worst poston. Ther result s n lne wth that of Borooah 2001 who whle usng census data fnds blacks to be dsadvantaged both n terms of wages as well as occupatonal attanment. Hs decomposton analyss suggests attrbutes as well as ethncty are mportant whereas for the Indans superor attrbutes compensate for much of the ethnc penalty. Aganst ths backdrop n addton to nvestgatng the ssue of unemployment ths paper also analyzes the type of jobs that people obtan whch extends the exstng lterature to provde an overall pcture of job market performance of the dfferent groups. Regardng occupatonal status rather than consderng just the two categores examned by Blackaby et. al and rce 2001 we apply multnomal logt estmaton to ncorporate other possble occupatonal decsons especally the possblty of beng n self-employment. In the case of occupatonal choces we estmate the predcted probabltes of belongng to dfferent stages of occupatonal status for all of the ethnc Brtsh and mmgrant groups whch offers more nformaton on ethnc dversty than that provded by Borooah 2001 and Carmchael and Wood It s worth mentonng that the exstng lterature of unemployment Blackaby et al and rce 2001 and occupatonal choces Borooah 2001 and Carmchael and Wood 2000 has not examned the mpact of the change n mmgraton polces and skll mx over tme but focused prmarly on the experences of the mnortes durng early and md-90 s. In our analyss we have compared labour market performance over a 14 year tme perod to hghlght the performance of dfferent communtes n recent years and capture the dynamcs on the bass of ethnc background. Fnally decomposton analyss has been carred out for 3

4 the dfferences n unemployment and occupatonal attanment between the mmgrants/mnortes vs a vs the whte ndgenous people to provde quanttatve evdence relatng to the debate regardng labour market dscrmnaton. Our estmates suggest that n recent years t s the ethnc mnorty mmgrants who are less represented n hgh-sklled better qualty jobs whereas the ssue of unemployment s prmarly concentrated wthn the mnorty Brtsh. The analyss has also suggests nterestng changes n the labour market over the perod and suggests assmlaton of mmgrant nto wage employment. Therefore dependng on ethncty and mmgraton status as well as the tme perod under consderaton labour market performance could dffer sgnfcantly and the relatvely poor performance of the mnorty communty s not only an ssue of unemployment but also that of under achevement n terms of occupatonal success. The paper s organzed as follows: secton 2 dscusses the data & key methodologes used n the analyss secton 3 descrbes the estmaton results and decomposton analyss of employment status. In secton 4 we present emprcal analyss of occupatonal choces and fnally secton 5 concludes the paper. 2. Data & ethodology Our analyss uses the summer quarter of the Quarterly Labour Force Survey QLFS for 1992 and We only consder males wthn the age band of 25 to 65 n the analyss. For the employment analyss we use household compostonal varables demographc varables regonal dummes qualfcaton dummes health status age age squared and martal status as controls. For household composton we use number of dependent chldren below 19 years n the household as the relevant varable and use dummes for havng no chldren one chldren two chldren and more chldren. We categorze the regons nto 3 broad groups: north south and London and use 6 dummes for academc qualfcatons: degree below degree A level O level below O level other qualfcaton and no formal qualfcaton. An addtonal dummy s used to capture whether the respondent has any health problem or not. In order to nvestgate the effect of ethncty and mmgraton status 14 dummes for the natves and foregn 4

5 born of whte black Indan akstan & Bangladesh 2 mxed Chnese and other ethnctes have been used wth the whte ndgenous people as the base group. In order to capture assmlaton effect of the mmgrants years spent n K and ts square are used as addtonal controls. For the dependent varable the sample has been classfed nto 4 groups: wage employed self employed other non employed comprsed of student government employee & tranee and nactve and unemployed. The analyss of occupatonal choces deal wth only the wage employed and they are categorzed nto 3 classes: professonal 3 sklled 4 and unsklled 5 occupatons. Gven the fact that the number of chldren along wth the health status of an ndvdual are not expected to nfluence of occupatonal choces of an ndvdual we have excluded the dummes for chldren and health status from the occupatonal attanment model. In our analyss we have consdered both the choce of employment status as an optmzaton decson of a utlty maxmzng ndvdual. In ths framework the probablty of choosng outcome s of ndvdual can be descrbed as: prob chooses s = s / exp t t exp where t ranges over all choces n the set. The followng logstc specfcaton specfes the probablty of choosng a partcular alternatve: J = exp x / exp x j j j= 1 j Here s an unknown K*1 vector of parameters correspondng to the K*1 vector x j whch s a vector of varables determnng the choce set of the ndvdual. In ths setup the problem of optmal occupatonal choce/employment status can be resolved wth multnomal logt L formulaton whle consderng 4 employment status: wage employed self employed other non employed and unemployed. 2 We use akstan to represent both akstan as well as Bangladesh ethnc groups. 3 rofessonals nclude a managers and senor offcals and b professonal occupatons. 4 Sklled ncorporate a assocate professonal and techncal b admnstratve and secretaral c sklled trades occupatons d personal servce occupatons and e sales and customer servce occupatons. 5 nsklled nclude a process plant and machne operatves and b elementary occupatons. 5

6 We then restrct our analyss wth only the sample of wage employed and model ther occupatonal choces also wth a L methodology. In ths case we consder choces among 3 categores of occupatons namely professonal sklled and unsklled. As our analyss compares dfferent groups n the next stage we proceed whle decomposng the dfferences n labour market outcomes between the ndgenous whte wth other groups. In ths regard dfferences n employment status or occupatonal attanment could arse from three possble sources: a dfferences n endowments b dfferences n returns and c dfferences n unobserved characterstcs. An unexplaned porton s often consdered as an approxmaton of any labour market dscrmnaton. Followng the methodology appled by Borooah 2004 f we assume that there are ndvduals =1.. n the sample then we could consder that each of them as orgnatng from any of our 14 mmgrant/ethnc communty denoted by g g= For the decomposton of employment status each ndvdual could agan fall nto any of our 4 categores j=1 4 and the lkelhood of an ndvdual from communty g beng n employment group j can be represented n the followng manner: g r g Y = j = F j Here g = g k k=1..k s the vector of observatons of ndvdual of communty g on K covarates where such varables determnes the lkelhood of choosng a partcular employment status j. The vector of correspondng coeffcent estmates are denoted by vector. Whle controllng for ther characterstcs f the mnorty g j and majorty would have been treated equally we could assume same beta vector faced by both groups: = and n that case the observed or raw dfferental n j j the probabltes of beng n a specfc employment group would be attrbuted entrely due the dfferences n endowments. However n the presence of dscrmnaton n the labour market the beta vectors are expected to dffer between two groups and n ths context Borooah 2004 shows that the employment probabltes between two groups can be decomposed n the followng manner: Ether j = [ ] + [ ] a j j j j j j 6

7 Or j = [ ] + [ ] b j j j j j j In equaton a dfferences n outcome between group and are decomposed whle consderng the majorty group as base and askng what would have been the average probablty of a mnorty ndvdual to be n group j f he would be treated as a member of the majorty communty. In equaton b the mnorty group s consdered as the base. Therefore the second part of the rght sde of the equatons captures the contrbuton of endowments whle generatng correspondng probabltes whereas the frst part s the dscrmnaton effect f any where the probabltes are generated solely by the dfferences n beta vectors. 3. Emprcal Analyss of Employment Status 3.1 Descrptve Statstcs As reflected n Table 1 the most strkng feature of the employment structure n the survey years s the fall n the unemployment rate from 8.5% n 1992 to 3.2% n 2006 reflectng the general upturn n the economy. A pont of nterest s that n comparson to the natves the mmgrants appear to suffer more n recessons wth a 12% unemployment rate n 1992 ths holds true for almost all categores of mmgrants. It s however nterestng that although n 1992 we observe wde dvergences between the mmgrants and the natves n 2006 the mmgrants seem to have smlar employment pattern to the natves. Such a convergence s also prevalent n Table 2 where except for akstans all other major groups are observed to have between 65%-70% representaton n wage employment. In terms of employablty among all groups of mmgrants and mnortes blacks experence the hghest level of unemployment n both of the survey years. In spte of sgnfcant reducton of unemployment over the perod 10% of blacks are reported to be unemployed n Table 1 : Employment rofle of the atve & Immgrant 1 n percentage Summer 1992 Summer 2006 Total atve Immgrant Total atve Immgrant 7

8 Wage Employed Self Employed nemployed Other onemployed student+tranee+nactve The percentages correspondng to each column refers to percentages of the correspondng group. Table 2 : Employment rofle of Dfferent Ethnc & Immgrant 2 n percentage Wage Employed Self Employed n Employed Whte atve Whte Immgrant Black atve Black Immgrant Indan atve Indan Immgrant akbd atve akbd Immgrant xed atve xed Immgrant Chnese atve Chnese Immgrant Other atve Other Immgrant The percentages correspondng to each column refers to percentages of the correspondng group. 3.2 Estmaton Results 6 A multnomal logt framework has been used to model occupatonal status and we consder 4 categores n ths regard: wage employed self employed unemployed and non employed tranee+student+nactve where wage employed are regarded as the base category see Appendx Table A.1 & A.2. Table 3 presents the predcted probabltes of occupatonal status for dfferent ethnc groups and mmgrants where such probabltes are calculated whle holdng the controls at the mean of the sample. 6 It can be argued that ncome as well as employment status of other members of the household could have mportant mpact on the employment decson of an ndvdual. In addton to these models we have tred wth a model wth a dummy varable capturng the presence of employed members n the household. However ths varable has not shown statstcal sgnfcance. 8

9 Therefore the table predcts the employment status for dfferent mmgrant/ethnc groups when they have the same characterstcs and dffer only n terms of ther ethncty or mmgraton status. The hgh rate of unemployment of the black Brtsh as suggested by the descrptve s also observed n predcted probabltes: n 1992 a black Brtsh wth the same endowment as other groups have as hgh as 22% probablty of endng up as unemployed whch although reduced to 6% n 2006 s hgher than most of the groups. In 2006 the South Asan Brtsh are predcted to experence smlar levels of unemployment whch s compatble wth ther lower partcpaton n wage employment. On the contrary ther poston n 1992 was not sgnfcantly dfferent than ther whte counterparts wth the Indan Brtsh havng hgher probablty of wage employment than most of the groups. We could therefore fnd a deteroraton of the relatve employablty of the South Asans over tme along wth a persstence of unemployment of the black ndgenous people. The South Asan Brtsh are however sgnfcantly dfferent n terms of ther hgh partcpaton n self employed actvtes and n both of the survey years they are predcted to have more than 20% probablty of workng n self employment. Among the mmgrants the performance appears to vary over tme and as suggested by the descrptve the predcted probabltes also ndcate convergence towards the whte ndgenous populaton 7. The probabltes reflect that n 2006 t s agan the black who experences the hghest level of unemployment among the mmgrants whereas n 1992 on the contrary ther relatve poston was better than most of the groups of mmgrants and t was the whte as well as the Indan mmgrants who were found to be the worst sufferer of recesson durng that perod. The partcpaton probablty of the South Asan along wth the whte mmgrants n salared jobs was also lower than average durng that perod. Over tme for the whte mmgrants partcpaton n wage employment ncreases to as hgh as 74% wth a modest unemployment probablty of 3%. Smlar shft also appears to have taken place for the Indan mmgrants and ther relatve poston n terms of employment status as a whole appears to have mproved. 7 For wage employment the varance of predctons of mmgrant groups around the predcton of whte natve has reduced from.027 to

10 Table 3: redcted robablty of Employment Status for Dfferent Wage Employed Wage Employed Self Employed Self Employed n employed n employed Whte atves Whte Immgrant Black atve Black Immgrant Indan atve Indan Immgrant akbd atve akbd Immgrant xed atve xed Immgrant Chnese atve Chnese Immgrant Other atve Other Immgrant Standard Errors are n parentheses. 6 robabltes of on employment although used n calculaton are not shown n the table. As half of the mmgrants of our sample are of whte ethncty wth heterogeneous background and skll mx t s nterestng to analyze ths group separately. Therefore n the backdrop of an ncreased poltcal debate about the recent surge of East 10

11 European mmgrants 8 n K we have extended our model whle ncorporatng 3 categores of whte mmgrants: mmgrants from Old E countres 9 whte mmgrants from the old Commonwealth 10 and SA and other whte mmgrants new E states and other mmgrants of whte ethncty. In terms of the controls the new model reflects almost smlar results to the man one. Regardng country of orgn of the mmgrants n 1992 other whte mmgrant are found to have sgnfcantly hgh unemployment probablty whch could be a reflecton of the dversty n skll mx of the whte mmgrants. Our results for 2006 however does not ndcate any sgnfcant dfferences among the whte mmgrants. 3.3 Decomposton Analyss From the predcted probabltes t appears that country of brth as well as ethnc background has an mportant mpact on the labour market experence of an ndvdual. However t should be kept n mnd that people of dfferent ethnctes or of country of orgn may have dfferences n household compostons demographc profles educatonal or occupatonal achevements health status or area of resdence. Therefore t s mportant to examne whether the dfferences n employment outcomes for dfferent groups are the result of dfferent attrbutes or unexplaned features related to the ethncty/mmgraton status. As dscussed n the methodology secton we perform decomposton analyss of the unemployment probablty between the whte Brtsh wth other ethnc and mmgrant groups. Table 4 depcts the result where panel a presents decomposton on the bass of equaton a and panel b presents the result for equaton b. For the black Brtsh our analyss suggests that the major porton of the dfference n unemployment probablty s generated not from the nferor endowments but out of the coeffcents and therefore we cannot rule out the possblty of labour market dscrmnaton for ther hgh unemployment rates. Our 1992 analyss shows that the coeffcents of the black Brtsh would have ncreased the unemployment probablty 8 From 1991 to 2001 there was a 68% ncrease of the mmgrants from Bulgara Hungary and Slovaka 242% ncrease for Ex-Yugoslavans 90% for the Romanans Source: BBC. 9 embers of E n 1986 eg Belgum France Germany Italy Luxemburg etherlands Denmark Greece ortugal Span and Ireland. 10 Canada Australa and South Afrca. 11

12 of a smlar whte to as hgh as 24% where the correspondng fgure for 2006 s 7%. On the other hand n comparson to the majorty group the mnorty communty also possess nferor endowments. For the Indan mmgrants n spte of plausble dscrmnaton reflected by the coeffcents ther superor endowment has made ther outcomes dfferent from that of the black natve. Accordng to 1992 estmates when the Indan mmgrants are treated as whte natve endowments vrtually plays no role n explanng the unemployment dfferental and when the whte natves are gven the coeffcents of the Indan mmgrants ther unemployment probablty ncreases by more than double. However the mnorty possess smlar or even better endowments than the majorty group and n sum we can say that f the Indan mmgrants are treated lke the whte Brtsh t s hghly plausble that they would even have lower unemployment than the latter group. The case of akstans on the contrary reflects the adverse effect of nferor endowments on ther employment probablty whch s further accentuated by the negatve effect of coeffcents. For akstan Brtsh accordng to panel b more than 100% of the dfference s generated by the endowments whereas the estmates of panel a suggest mportance of coeffcents. In the case of the akstan mmgrants the estmates ndcate the mportance of both coeffcents as well as endowments and such a concluson holds true for the black mmgrants as well. The mportance of coeffcents along wth the attrbutes s found to be mportant for the whte mmgrant communty as well. For 1992 as suggested n panel a of Table 6 unexplaned factors appear to be the sole determnant for the hgher unemployment of the whte mmgrants whereas accordng to panel b nferor attrbutes are also partly responsble for ther poor performance. However n contrast to other groups our 1992 estmates show that havng coeffcents of the mmgrants s expected to mprove the poston of the whte natves and we could nterpret such a contradctory result as an ndcaton of the mportance of unexplaned factors eg. ablty experence etc not captured n the model whch mght have a postve nfluence on the employment outcome of the mmgrants. 12

13 13 Table 4: Decomposton Results of Employment Status dfference n the probablty of unemployment anel a anel b anel a anel b Whte atve W vs. Whte Immgrant W Ws are treated as Ws Ws are treated as Ws Ws are treated as Ws Ws are treated as Ws Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = =.0184 Coeffcent Effect = = Coeffcent Effect = = Attrbutes Effect = =0 Attrbutes Effect = =-.032 Attrbutes Effect = = Attrbutes Effect = =.0108 Whte atve W vs. Black atve B Bs are treated as Ws Ws are treated as Bs Bs are treated as Ws Ws are treated as Bs Sample Average between Hgh and Low =-.223 Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = =-.049 Coeffcent Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = =-.018

14 14 Whte atve W vs. Black Immgrant B Bs are treated as Ws Ws are treated as Bs Bs are treated as Ws Ws are treated as Bs Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = =-.078 Coeffcent Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs Indan Immgrant I Is are treated as Ws Ws are treated as Is Is are treated as Ws Ws are treated as Is Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = = Attrbutes Effect = = Attrbutes Effect = =.0814 Attrbutes Effect = =.0057 Attrbutes Effect = = Whte atve W vs akstan atve

15 15 s are treated as Ws s are treated as Bs Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = =.0071 Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs akstan Immgrant Bs are treated as Ws Ws are treated as Bs s are treated as Ws Ws are treated as s Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = = Coeffcent Effect = =-.065 Attrbutes Effect = =-.052 Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = =.0298

16 4. Emprcal Analyss of Occupatonal Choce 4.1 Descrptve Statstcs In terms of occupatonal status there has been an ncreased presence of mmgrants n unsklled occupatons over tme whch holds true for most of the ethnc groups Table 5 Table 6. By contrast wth an excepton of the Indans we observe only a moderate change n the partcpaton of mmgrants n professonal jobs. For the Indan mmgrants there has been an mpressve 8-percentage pont ncrease whch s clearly n contrast to that of ther akstan counterparts: the latter have nstead experenced an 11-percentage pont ncrease n the partcpaton of blue-collar jobs over the same tme perod. It s nterestng to note that n comparson to the mmgrants mnorty Brtsh groups have seen an overall mprovement n ther occupatonal attanment wth a tendency for convergence of all groups of ndgenous Brtsh. Table 5 : Descrptve on Occupatonal Attanment 3 n percentage Summer 1992 Summer 2006 Total atve Immgrant Total atve Immgrant rofessonal Sklled nsklled The percentages correspondng to each column refers to percentages of the correspondng group. Table 6 : Occupatonal Attanment of Dfferent Ethnc & Immgrant 4 rofessonal Sklled nsklled Whte atve Whte Immgrant Black atve Black Immgrant Indan atve Indan Immgrant akbd atve akbd Immgrant xed atve xed Immgrant

17 Chnese Immgrant Other atve Other Immgrant The percentages correspondng to each column refers to percentages of the correspondng group. 4.2 Estmaton Results In order to understand the labour market experence of the mmgrants and ethnc mnortes we analyze the type of jobs the wage employed perform by estmatng a multnomal logt model of occupatonal choce Appendx Table B.1 & B.2. Table 7 compares the occupatonal choces of dfferent groups of people based on ther ethncty and country of orgn holdng all other controls at the mean of the sample. In most of the cases the predcted probabltes reflects the results found n the descrptve statstcs wth lower predcted partcpaton of mnortes and mmgrants n hgh sklled jobs. In 2006 ceters parbus black mmgrants are found to be n the worst poston n terms of occupatonal status wth a 41% probablty of workng n unsklled occupatons. A smlar scenaro s found for the South Asan mmgrants who have more than 20% probablty of workng n blue collared occupatons. However the blacks along wth the South Asan mmgrants were n much better poston n 1992 havng greater than 35% probablty of workng as professonal. Therefore over tme there has been a shft n occupatonal attanment and for the black as well as the Indan mmgrant such a shft s most sgnfcant as ther partcpaton n blue collared occupatons ncreases by more than four fold. Whte mmgrant also experences a sgnfcant ncrease of partcpaton n unsklled occupatons wth a 10-percentage pont reducton n the partcpaton of professonal jobs. The scenaro s completely opposte for the ndgenous people of both whte and ethnc mnorty background experencng an mprovement n occupatonal status over tme. The estmates for the early 90 s show that black South Asans and other Brtsh had lower probablty to work n professonal jobs. However over tme there has been a sgnfcant mprovement n the professonal achevement of these groups whch s completely n contrast wth the experence of ther mmgrant counterparts. 17

18 Table 7: redcted robabltes of Occupatonal Choces for Dfferent 7 rofessonal Sklled nsklled Whte atves Whte Immgrant Black atve Black Immgrant Indan atve Indan Immgrant akbd atve akbd Immgrant Standard Errors are n parentheses. In Appendx Table B.1 and B.2 we extend our man model to ncorporate more categores of whte mmgrants eg. Old E Englsh speakng and other whte mmgrant. Our estmates of 1992 shows that n comparson to whte Brtsh all other groups of whte mmgrants had a hgher probablty of workng n professonal as well as n sklled occupatons. In 2006 mmgrants of Englsh speakng countres were stll found to have a hgher probablty of workng n both professonal and sklled occupatons. The remanng category of whte mmgrants on the other hand were found to have sgnfcantly lesser probablty to work n such occupatons. It can be argued that ndvdual s occupatonal choce mght not be confned only to the avalable occupatonal categores but an ndvdual could choose among all possble employment opportuntes. Incorporatng ths 4 th category s expected to provde a broader analyss and avod potental self-selecton bas that could arse from the modellng of occupatonal choces. In ths context we extended our analyss of occupatonal choce whle consderng an addtonal group whch comprses the choce of non wage employment all other categores except wage employment n our 18

19 employment status equaton. However as descrbed n Appendx Table B.1 and B.2 ncluson of addtonal category has not have any sgnfcant change on the coeffcent estmates. 4.3 Decomposton Analyss Table 8 presents a decomposton analyss of the predcted probabltes of endng up a professonal occupaton. For both of the years the decomposton analyss shows the relatve mportance of unexplaned factors to black Brtsh as well as black mmgrants. Therefore the poor performance of the black communty n terms of occupatonal attanment s partly due to the dscrmnatory atttude of the employers. For the black natve panel a 58% of the dfference can be descrbed as resdual effect n 1992 and ths rses to 142% panel b. For ther mmgrant counterparts all of our 4 panels suggest more than 100% contrbuton of the coeffcents whch n turn ndcates that f the black mmgrant s treated as a whte natve we would expect ther partcpaton n professonal occupaton to ncrease even more than the latter. As revealed n our L estmates n comparson to whte natves ther mmgrant counterparts are found to have greater presence n professonal occupaton. The case of the whte mmgrants however reflects the opposte pcture of ther black counterparts. Although just lke the latter group n most of the cases the major part of the dfference s comng from unexplanable part coeffcents are havng postve mpact on the occupatonal status of the former group. In ths context n addton to certan endowments the unexplaned part can be consdered as a reflecton of unobserved attrbutes skll-level or ablty that has not been captured by the covarates of the model and the estmates mght ndcate the plausble mportance of such unobserved ablty as the source of ther success. For the Indan mmgrants on the contrary t s the attrbutes rather than the unexplaned resdual factors that are playng domnant role. In both of the sample years the Indan mmgrants are found to be endowed wth better attrbutes whch s n contrast to other groups. Gven ther superor attrbutes n 1992 we observe the Indan mmgrants havng greater probablty to work n professonal occupatons. Decomposton analyss of 2006 reflects that the coeffcents of whte ndgenous 19

20 people would on the contrary reduce the occupatonal success of the Indan mmgrants from 43% to 38% whereas for the whte natves changed coeffcents would have no sgnfcant effect. The case of the akstan mmgrants ndcates the opposte scenaro of that for Indan mmgrants. Accordng to panel a of 1992 analyss 60% of the dfference n probabltes s generated by the nferor endowment where the correspondng fgure for 2006 s 64%. The analyss however ndcates mportant contrbuton of unexplaned factors as well. As a whole although the results are mxed we can argue for a strong correlaton of ther nferor attrbutes to ther poor performance n occupatonal poston. Whle summarzng both sets of decomposton analyss we could broadly classfy 4 possble scenaros: a the mportance of coeffcents wth nferor attrbutes of the mnorty group: case of black Brtsh and black mmgrants b mportance of coeffcents wth superor endowment of the mnortes: case of Indan mmgrants c nferor endowments accentuatng the negatve effect of the coeffcents: case of akstan mmgrants d postve effect of coeffcents on occupatonal attanment: case of whte mmgrants. 20

21 Table 8: Decomposton Results of Occupatonal Choces dfference n the probablty of beng n professonal occupaton anel a anel b anel a anel b Whte atve W vs. Whte Immgrant W Ws are treated as Ws Ws are treated as Ws Ws are treated as Ws Ws are treated as Ws Sample Average between Hgh and Low Sample Average between Hgh and Low Sample Average between Hgh and Low Sample Average between Hgh and Low = = = = Coeffcent Effect = Coeffcent Effect = Coeffcent Effect = Coeffcent Effect = =-.067 = = =.023 Attrbutes Effect = Attrbutes Effect = Attrbutes Effect = Attrbutes Effect = = =.0476 =.0103 = Whte atve W vs. Black atve B Bs are treated as Ws Ws are treated as Bs Bs are treated as Ws Ws are treated as Bs Sample Average between Hgh and Low Sample Average between Hgh and Low Sample Average between Hgh and Low Sample Average between Hgh and Low =.1588 =.1588 =.04 =.04 21

22 22 Coeffcent Effect = =.0916 Coeffcent Effect = =.2258 Coeffcent Effect = =.0671 Coeffcent Effect = =.0596 Attrbutes Effect = =.0672 Attrbutes Effect = =-.067 Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs. Black Immgrant B Bs are treated as Ws Ws are treated as Bs Bs are treated as Ws Ws are treated as Bs Sample Average between Hgh and Low =.119 Sample Average between Hgh and Low =.119 Sample Average between Hgh and Low =.14 Sample Average between Hgh and Low =.14 Coeffcent Effect = =.1696 Coeffcent Effect = =.1219 Coeffcent Effect = =.1572 Coeffcent Effect = =.2305 Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs Indan atve I Is are treated as Ws Ws are treated as Is

23 23 Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = = Coeffcent Effect = = Attrbutes Effect = = Attrbutes Effect = =.015 Whte atve W vs Indan Immgrant I Is are treated as Ws Ws are treated as Is Is are treated as Ws Ws are treated as Is Sample Average between Hgh and Low = Sample Average between Hgh and Low = Sample Average between Hgh and Low =-.064 Sample Average between Hgh and Low =-.064 Coeffcent Effect = =.0426 Coeffcent Effect = =.0375 Coeffcent Effect = = Coeffcent Effect = =.0118 Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs akstan atve s are treated as Ws Ws are treated as s

24 24 Sample Average between Hgh and Low = Sample Average between Hgh and Low = Coeffcent Effect = =.0141 Coeffcent Effect = =.114 Attrbutes Effect = = Attrbutes Effect = = Whte atve W vs akstan Immgrant s are treated as Ws Ws are treated as s s are treated as Ws Ws are treated as s Sample Average between Hgh and Low =.1175 Sample Average between Hgh and Low =.1175 Sample Average between Hgh and Low =.1707 Sample Average between Hgh and Low =.1707 Coeffcent Effect = =.0442 Coeffcent Effect = =.0869 Coeffcent Effect = =.0606 Coeffcent Effect = =.1941 Attrbutes Effect = =.0733 Attrbutes Effect = =.0306 Attrbutes Effect = =.1101 Attrbutes Effect = =-.0234

25 5. Concluson The problem of unemployment and under attanment of mmgrants and ethnc mnortes n K has been a debated ssue for decades. The research to date s however confned prmarly to examnng the unemployment problem of certan groups rather than analyzng the overall experence of dfferent communtes n labour market. In ths paper we have extended the exstng emprcal analyss whle combnng both the ssue of employment and occupatonal attanment of dfferent mmgrants and mnortes. We prmarly nvestgate: a whether the ethnc mnortes and mmgrants suffer hgher unemployment than the whte ndgenous people b dependng on ethncty and/or country of brth what are the probabltes of dfferent groups to reach the hghest stage of occupatonal ladder c whether there has been any sgnfcant changes of the labour market experence over tme and d what are the reasons behnd the dfferences n performance between the whte ndgenous people and the mnortes/mmgrants. Such ssues are explored whle estmatng multnomal logt model of employment status as well as occupatonal choces for 1992 and Decomposton analyss dscusses the ratonale behnd the dverse performance of dfferent groups. The research confrms the problem of unemployment of the ethnc mnortes n partcular. Accordng to our analyss the black Brtsh experence hgher levels of unemployment than ther whte counterparts and n recent years t s the black and the South Asan Brtsh who has hgher unemployment probablty. Immgraton status does not appear to be a crucal factor for unemployment and our analyss suggests that over tme the mmgrants tend to assmlate wth the natves and to have smlar employment pattern. The self employment probablty s however crtcally nfluenced by the mmgraton status and n recent years we observe a lesser presence of the mmgrants n self employed occupatons. akstan and Bangladesh natves n contrast are the ones always havng sgnfcantly hgh probablty to work as self employed. Regardng occupatonal attanment we observe dfferent pcture: there s a clear segregaton n terms of mmgraton status and n recent year mnorty mmgrants eg. black South Asan and Chnese are less represented n professonal or sklled occupatons. In the early 90 s by contrast we observe a lesser representaton of the black and the akstan Brtsh n superor qualty jobs whch s 25

26 consstent wth the fndng of Carmchael & Woods 2000 for Certan categores of mmgrants such as whtes and Indans had a greater probablty of workng as professonals durng that perod. However over tme for the mnorty Brtsh have seen an overall mprovement n occupatonal attanment as reflected n the predcted probabltes and we observe a tendency to convergence towards a smlar pattern of occupatonal choce as whte Brtsh. A decomposton analyss of the estmates ndcate the mportance of both explaned as well as unexplaned factors when analyzng the performance of dfferent groups. Ths s n contrast to that of Carmchael & Woods 2000 who emphaszes the dscrmnatory selecton process of employers n the Brtsh labour market. Accordng to our analyss for the black Brtsh as well as the black mmgrants n most cases endowments cannot explan ther nferor performance and we cannot rule out the possblty of dscrmnaton aganst them. For the akstan mmgrants n addton to a certan degree of dscrmnaton less favorable attrbutes are playng mportant role n ther poor performance. The superor performance of the Indan mmgrants s caused prmarly by ther superor attrbutes and there been no dscrmnaton they would be able to attan even better status n the job market. Based on such analyss t can be argued that there exsts wde varaton n the labour market experence of dfferent ethnc and mmgrant groups and the reason behnd such dversty les both on the dfferences n skll-mx and characterstcs as well as the ways labour market treats them. In sum our estmaton result establshes that n early 90 s although there was no clear cut evdence of segregaton n terms of employablty certan groups of mnorty Brtsh were less represented n hgh-sklled professonal occupatons whereas some of the mmgrants were n greater proporton n such jobs. Over tme unemployment nequalty has become sgnfcant among the mnorty Brtsh and at the same tme mmgrants representaton n superor occupatons has reduced sgnfcantly. Over tme there s a tendency of the mmgrants to assmlate n terms of employment pattern and the ethnc mnorty to converge towards a smlar occupatonal structure and such a shft could be ndcatve of a changed skll mx of the mmgrant group a postve structural shft of the economy as well as the ncreased tendency of the mmgrants and mnortes to assmlate wth the better performng whte ndgenous 26

27 group. Ths certanly offers optmsm n favour of a more equal employment structure. olces amng at such unbased and effcent labour market where ethncty or country of brth do not constran ndvdual s earnng potental should on one hand focus on targetng the nferor groups wth better educaton or tranng facltes and on the other apply better mechansms to enforce the employers for a secular selecton strategy. Although our estmates provde mportant nsghts nto the labour market performance of the mmgrants and mnortes due to smaller number of observatons we were not able to analyze certan groups n detal. In addton nformaton on certan varables lke language fluency or relgon would enrch the analyss as well. Therefore data sets wth greater representaton of mnorty groups and addtonal nformaton on certan varables would provde better nsghts nto present analyss. References: Arrow K. J. 1998: What has Economcs to Say about Racal Dscrmnaton Journal of Economc erspectves vol. 12 pp Blackaby D. Drnkwater S. Lesle D. & urphy. 1997: A cture of ale and Female nemployment Among Brtan s Ethnc nortes Scottsh Journal of oltcal Economy vol. 44 no. 2 pp Blackaby D. Lesle D. urphy. & Leary. 2002: Whte/ethnc norty Earnng and Employment Dfferentals n Brtan: Evdence from the LFS Oxford Economc aper vol. 54 pp Becker G. 1957: The Economcs of Dscrmnaton The nversty of Chcago ress. Bell B. D. 1997: The erformance of Immgrants n the nted Kngdom: Evdence from the GHS Economc Journal vol. 107 pp

28 Borooah V. 2004: Caste Inequalty and overty n Inda Revew of Development Economcs manuscrpt no acceptance Borooah V. 2001: How do Employees of Ethnc Orgn Fare on the Occupatonal Ladder n Brtan Scottsh Journal of oltcal Economy vol. 48 no. 1 pp Carmchael F. & Woods R. 2000: Ethnc enaltes n nemployment and Occupatonal Attanment: Evdence for Brtan Internatonal Revew of Appled Economcs vol. 14 no. 1 pp Gabrel. Wllams D. & Schmtz S. 1990: The Relatve Occupatonal Attanment of Young Blacks Whtes and Hspancs Southern Economc Journal vol. 57 no. 1 pp Judge G. Grffths W. Hll C. Lutkepohl H. & Lee T The Theory and ractce of Econometrcs 2 nd edton John Wley and sons. rce S. W. 2001: The nemployment Experence of ale Immgrants n England Appled Economcs vol. 33 pp Robertson D. & Symons 1990: The Occupatonal Choce of Brtsh Chldren The Economc Journal vol. 100 no. 402 pp Schmdt. & Strauss R. 1975: The redcton of Occupaton sng ultple Logt odels Internatonal Economc Revew vol. 16 no. 2 pp Sprggs W. & Wllams R. 1996: A Logt Decomposton Analyss of Occupatonal Segregaton: Results for the 1970s and 1980s The Revew of Economcs and Statstcs vol. 78 no. 2 pp Stewart. 1983: Racal Dscrmnaton and Occupatonal Attanment n Brtan The Economc Journal vol. 93 no. 371 pp

29 Appendx A: ultnomal Logt Estmaton of Employment Status Table A.1: Employment Status Estmaton 1992 an odel Extended odel dfferent ethnc categorzaton Self employed n employed on emplyed Self employed n employed on emplyed Age *** 9.02*** 22.04*** 2.82*** 9.03*** 22.03*** Age * 9.02*** 26.67*** 1.66* 9.02*** 26.63*** arred *** 18.90*** ** 18.50*** Onekd Twokd ** 4.46*** * 4.35*** 1.10 orekd *** 12.87*** 7.86*** 5.66*** 12.49** 7.68*** Stay *** *** 2.57** *** Stay ** *** 2.13** *** Whte mmgrant * 8.66*** Black mmgrant *** 1.76* *** Indan mmgrant *** *** akstan mmgrant xed mmgrant 1.96** ** Other mmgrant Chnese mmgrant Black *** 2.93*** *** 2.95*** Indan akbd * *** 1.81* *** Chnese *** 54.08*** ** 53.70*** xed ** ** 2.21** ** 29

30 Otherrace *** *** OldE mmgrant *** Cwealth mmgrant 2.38** *** Otherwhte mmgrant ** 8.34*** Hgh degree 7.81*** 17.97*** 8.99*** 7.69*** 17.94** 8.95*** Below degree 8.54*** 12.60*** 6.74*** 8.49*** 12.55** 6.70*** Alevel *** 11.28*** 8.79*** 3.72*** 11.28** 8.94*** Olevel *** 12.04*** 8.11*** 4.25*** 12.00** 8.18*** Below Olevel 3.10*** 5.25*** 2.00** 3.09*** 5.24*** 1.94* Other qualfcaton 4.01*** 5.94*** 4.40*** 3.95*** 5.76*** 4.46*** South *** 2.12** *** 2.09** 1.16 orth *** *** 2.70*** *** Health problem *** 61.35*** ** 60.88*** Constant *** 5.89*** 11.02*** 9.20*** 5.91*** 11.03*** Observatons Absolute value of z statstcs n parentheses * sgnfcant at 10%; ** sgnfcant at 5%; *** sgnfcant at 1% Table A.2: Employment Status Estmaton 2006 Extended odel dfferent an odel ethnc classfcaton Self employed n employed on employed Self employed n employed on employed Age * 14.41*** * 14.37*** Age ** 2.01** 18.56*** 2.31** 2.03** 18.52*** arred *** 12.69*** 16.11*** 4.09*** 12.70*** 16.12*** Onekd *** 2.81*** 2.59*** 3.20*** 2.83*** 2.60*** 30