Employment and earning differences in the early career of ethnic minority British graduates: the importance of university career, parental background and area characteristics

Ethnic minorities in the U.K. are more likely than the white majority to gain university qualifications, but experience worse labour market outcomes on average. This paper compares employment and earnings of British graduates from ethnic minorities to those of white British graduates to analyse whether ethnic labour market differences exist among the highly qualified, and whether they can be explained by differences in parental background, local area characteristics or differences in university careers. These factors account for a substantial part of persistent ethnic differences in earnings, but explain very little of the differences in employment. Compared to the literature estimating ethnic labour market inequalities on people with any level of qualification, we find smaller ethnic differences in employment and almost no differences in earnings among graduates entering the labour market. The results are robust to various changes in model specification.