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Does Wealth Explain BlackWhite Differences in Early Employment Careers?

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  • Rendon, Silvio

Abstract

This paper inquires on the effect of initial wealth in racial differences in early employment careers. I set up a dynamic model in which people simultaneously search for a job and accumulate wealth, and fit it to data from the National Longitudinal Survey (1979-cohort). With the recovered behavioral parameters, I perform regime changes consisting in giving blacks (i) the initial wealth distribution, and (ii) the arrival rates and wage offer distribution of whites. These counterfactual experiments show that initial wealth has a modest influence in the black-white difference in early employment careers in comparison with labor market variables.

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Bibliographic Info

Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

Volume (Year): 25 (2007)
Issue (Month): (October)
Pages: 484-500

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Handle: RePEc:bes:jnlbes:v:25:y:2007:p:484-500

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Cited by:
  1. Rendon, Silvio & Cuecuecha, Alfredo, 2007. "International Job Search: Mexicans In and Out of the US," IZA Discussion Papers 3219, Institute for the Study of Labor (IZA).
  2. Maury Gittleman, 2011. "Medicaid and Wealth: An Examination Using the NLSY79," Working Papers 448, U.S. Bureau of Labor Statistics.
  3. Ivan Grguric, 2005. "Moving up the income ladder? What are the obstacles: a case study of indigenous people in Latin America," Financial Theory and Practice, Institute of Public Finance, vol. 29(4), pages 361-381.

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