Catholic-Protestant Earnings Differentials in Northern Ireland 2011 NISRA BDR Programme

Labour market inequality between the Catholic and Protestant communities in Northern Ireland and the associated 'fair employment' debate have long been of concern to policy makers, researchers and the Northern Ireland public alike. For example, the Equalities Commission for Northern Ireland (ECNI) publishes an annual Fair Employment Monitoring Report, now in its 31st year, presenting up to date data on this issue. However, much of this debate, and ongoing monitoring, focusses on unemployment and employment differentials between the two communities, with little analysis of wage and/or earnings differentials between the two communities. For example, the Fair Employment Monitoring Reports contain no analysis of wage or earnings differentials. This reflects a historical and ongoing lack of suitable data with which to measure and seek to understand such wage/earnings differentials. The closest exception in the academic literature is probably the Borooah et al. (1995) study of income differentials using data from the Family Expenditure Survey, which found lower mean household income among the Catholic community than among the Protestant community, which was not explained by differences in productive characteristics. In terms of regular monitoring, the Northern Ireland Executive published estimates of median wage differentials each year based on the LFS, as part of its series of LFS Religion Reports, most recently for 2017 (https://www.executiveoffice-ni.gov.uk/sites/default/files/publications/execoffice/lfs-religion-report-2017.pdf), but now
discontinued. The most recent estimate (for 2017) suggested no median wage differential. It is unclear, however, how much we can learn from this or previous LFS Religion Report estimates given their imprecision and volatility over time, reflecting the small sample size and also likely the measurement problems concerning the derived wage variable produced by the LFS. Nor do the LFS Religion Reports examine differences in relevant observable characteristics between Catholics and Protestants that may help to explain or even obscure wage differentials. The bottom line is that there remains very little credible evidence on this potentially crucial aspect of labour market inequality between Catholics and Protestants in Northern Ireland, both historically and currently.

Despite this lack of existing evidence, however, it is difficult to rule out that such a wage gap may have existed as late as 2011, and might perhaps even persist more recently. The trends over time in the unemployment differential may be suggestive of this. Specifically, although there was a substantial narrowing of Catholic-Protestant unemployment
differentials in the decades running up to 2011, Rowland et al. (2021) show that an unemployment gap between the two communities still existed at that point, at least for men. Further, the study shows that this gap could be partly but not fully explained by differences in the observable characteristics of the two communities, including where people live.

The proposed research will address this important gap in our understanding of inequality between the Catholic and Protestant communities in Northern Ireland by providing more precise and more detailed quantitative evidence than has previously been possible on the wage differential as of 2011 using newly available data (the Earnings and Employees
Study (EES) 2011). In addition to making an important academic contribution, by providing a historical benchmark from which to compare, this project will help to inform the ongoing monitoring efforts of, for example, ECNI. Such monitoring can be crucially important. The ECNI Chief Commissioner, Geraldine McGahey, is on record as saying: "Our experiences show that if something is not measured, it is unlikely to be changed" (https://www.equalityni.org/Footer-Links/News/Delivering-Equality/31st-Fair-Employment-Monitoring-Report-published).