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Education and Labor Market Discrimination

Author

Listed:
  • Kevin Lang
  • Michael Manove

Abstract

Using a model of statistical discrimination and educational sorting, we explain why blacks get more education than whites of similar cognitive ability, and we explore how the Armed Forces Qualification Test (AFQT), wages, and education are related. The model suggests that one should control for both AFQT and education when comparing the earnings of blacks and whites, in which case a substantial black-white wage differential emerges. We reject the hypothesis that differences in school quality between blacks and whites explain the wage and education differentials. Our findings support the view that some of the black-white wage differential reflects the operation of the labor market. (JEL I21, J15, J24, J31, J71)

Suggested Citation

  • Kevin Lang & Michael Manove, 2011. "Education and Labor Market Discrimination," American Economic Review, American Economic Association, vol. 101(4), pages 1467-1496, June.
    • Handle: RePEc:aea:aecrev:v:101:y:2011:i:4:p:1467-96
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    More about this item

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination

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