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Racial Disparity in Unemployment

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  • Joseph A Ritter

    (University of Minnesota)

  • Lowell J Taylor

    (Carnegie Mellon University)

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    Abstract

    In the United States, black workers earn less than their white counterparts and have higher rates of unemployment. Empirical work indicates that most of this wage gap is accounted for by differences in cognitive skills that emerge at an early age. In this paper, we demonstrate that the same is not true for black-white disparity in unemployment. A large unexplained unemployment differential motivates the paper's second contribution-—a potential theoretical explanation. This explanation is built around a model that embeds statistical discrimination into the subjective worker evaluation process that lies at the root of the efficiency-wage theory of equilibrium unemployment. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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    Bibliographic Info

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

    Volume (Year): 93 (2011)
    Issue (Month): 1 (February)
    Pages: 30-42

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    Handle: RePEc:tpr:restat:v:93:y:2011:i:1:p:30-42

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    Cited by:
    1. Daniel Borowcyzk-Martins & Jake Bradley & Linas Tarasonis, 2014. "Racial Discrimination in the U.S. Labor Market: Employment and Wage Differentials by Skill," Bristol Economics Discussion Papers 14/637, Department of Economics, University of Bristol, UK.
    2. David W. Johnston & Grace Lordan, 2014. "When Work Disappears: Racial Prejudice and Recession Labour Market Penalties," CEP Discussion Papers, Centre for Economic Performance, LSE dp1257, Centre for Economic Performance, LSE.
    3. Gustavo Yamada & Pablo Lavado & Luciana Velarde, 2013. "Habilidades No Cognitivas y Brecha de Género Salarial en el Perú," Working Papers, Departamento de Economía, Universidad del Pacífico 13-20, Departamento de Economía, Universidad del Pacífico, revised Dec 2013.
    4. Donald Freeman, 2012. "On (Not) Closing the Gaps: The Evolution of National and Regional Unemployment Rates by Race and Ethnicity," The Review of Black Political Economy, Springer, Springer, vol. 39(2), pages 267-284, June.
    5. Merlino, Luca Paolo, 2012. "Discrimination, technology and unemployment," Labour Economics, Elsevier, Elsevier, vol. 19(4), pages 557-567.

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