The US literature on ethnic minority pay has tended to focus on wage differentials between white and black ethnic groups, the two largest ethnic groups in the US. Studies have tended to find a large wage differential between black and white men, although this does appear to have reduced over time with the black/white earnings ratio increasing from just under 60% in 1967 to around 80% by 2009 (Lang and Lehmann (2012)). This broadly mirrors trends in the gender pay gap. Studies looking at wage gaps over the life-cycle find that there is little evidence of an ethnicity pay gap during early working life, but that this grows to around 14% by age 40 (Tomaskovic-Devey et al (2005)). Evidence on the role of education on the size of the ethnicity pay gap is mixed. Some studies find that, among young men, the black/white pay differential appears, in part, to be explained by education (O’Neill (1990), Rodgers and Spriggs (1996) and Carneiro, Heckman, and Masterov (2005)). For example, the pay differential decreases when controlling for performance on the Armed Forces Qualifying Test (Neal and Johnson (1996)). Studies also find that, among college-educated men, there is no difference in pay between black and white males (Black et al (2006)). This might suggest the ethnicity pay gap can largely be 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  explained by human capital differences in white-collar sectors, but not in blue-collar jobs (Bjerk (2007)).
Note: A positive gender pay gap in this chart indicates that women earn less than men. Finally, if we look at unconditional gender pay gaps by sector (Chart 10), these gaps are broadly-based across sectors. The largest gaps are in the finance sector, both in London and the rest of the UK. These average close to 40%. This is materially larger than the next-worst sector, ICT, which averages around 30%. The evolution of the gender pay gap in finance suggests it has fallen only modestly, from over 45% in the mid-1990s to around 38% in 2018. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  Chart 10: Median gender pay gap by sector, sample average  Gender pay gap, per cent  45 40  London  Other  35 30 25 20 15 10 5 0  Agriculture  Industry  Construction  Trade and transport  ICT  Male male  Finance  Real Estate  Professional Public sector  Other  Female female  Source: ONS Labour Force Survey and Bank of England calculations. Note: A positive gender pay gap in this chart indicates that women earn less than men. The unconditional ethnicity pay gap exhibits a rather different pattern than the gender pay gap. This gap has also been materially lower, averaging around 4% over the sample. As the gender gap fell sharply in the decade to 2005, the ethnicity pay gap was broadly stable at around 2% (yellow dots in Chart 11).