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Estimating The Effect Of Racial Discrimination On First Job Wage Offers

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Author Info
Zvi Eckstein
Kenneth I. Wolpin

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Abstract

In this paper we develop and implement a method for bounding the extent to which labor market discrimination can account for racial wage differentials. The method is based on a two-sided, search-matching model that formally accounts for unobserved heterogeneity and unobserved offered wages. We find that racial differences in offered wages are proportionately twice (three times) as large as racial differences in accepted wages for high-school dropouts (high-school graduates). The results indicate that discrimination could account for the entire racial wage-offer differential for high-school dropouts and for high-school graduates, i.e., the bound on the extent of discrimination is not informative. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 81 (1999)
Issue (Month): 3 (August)
Pages: 384-392
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Handle: RePEc:tpr:restat:v:81:y:1999:i:3:p:384-392

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  1. GianMarco Ottaviano & Giovanni Peri, 2004. "The Economic Value of Cultural Diversity: Evidence from US cities," Econometric Society 2004 North American Summer Meetings 91, Econometric Society. [Downloadable!]
    Other versions:
  2. Silvio Rendon, 2006. "Does Wealth Explain Black-White Differences in Early Employment Careers?," Working Papers 0603, Centro de Investigacion Economica, ITAM. [Downloadable!]
    Other versions:
  3. Audra J. Bowlus & Zvi Eckstein, 1998. "Discrimination and Skill Differences in an Equilibrium Search Model," UWO Department of Economics Working Papers 9802, University of Western Ontario, Department of Economics. [Downloadable!]
    Other versions:
  4. Francesco Renna & Randall King, 2007. "The Impact of Racial Discrimination on the Early Career Outcomes of Young Men," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(3), pages 269-278, September. [Downloadable!] (restricted)
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