A cross-section analysis of the fairness-of-pay perception of UK employees

Abstract

Using cross-section data from the British Social Attitudes Survey, this paper contributes to the understanding of individuals’ fairness perceptions by estimating what seems to be the first fairness perceptions-of-pay equations for Britain. The results suggest that, consistent with the existence of discrimination in the labour market, non-white workers perceive their pay as disadvantageously unfair. In contrast, and rather surprising, it is found that female employees have more favourable fairness-of-pay perceptions than male employees. There is some evidence that with age, workers feel less fairly paid. Thus, the findings reveal that demographic characteristics matter and consequently, tackling pay alone may not eliminate feelings of underpayment.