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Wages, Sorting on Skill, and the Racial Composition of Jobs

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  • Barry T. Hirsch

    (Trinity University and IZA, Bonn)

  • David A. Macpherson

    (Florida State University)

Abstract

Wages for black and white workers are substantially lower in occupations with a high density of black employees, following standard controls. Such correlations can exist absent discrimination or as a result of discrimination. In wage level equations, partial correlations fall sharply after controlling for occupational skills. Longitudinal estimates accounting for worker heterogeneity indicate little wage change associated with changes in racial composition. Results support a "quality sorting" rather than discrimination explanation, with racial density serving as an index of unmeasured skills. Discrimination reflected in racial wage gaps occurs within occupations or across occupations in a manner uncorrelated with racial composition.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 22 (2004)
Issue (Month): 1 (January)
Pages: 189-210

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Handle: RePEc:ucp:jlabec:v:22:y:2004:i:1:p:189-210

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References

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Cited by:
  1. Judith Hellerstein & David Neumark, 2004. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," PPIC Working Papers 2004.05, Public Policy Institute of California.
  2. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pelizzari, 2010. "Moving to Segregation: Evidence from 8 Italian cities," EIEF Working Papers Series 1109, Einaudi Institute for Economics and Finance (EIEF), revised Apr 2011.
  3. Paul Frijters & Michael A. Shields & Nikolaos Theodoropoulos & Stephen Wheatley Price, 2004. "Testing For Employee Discrimination Using Matched Employer-Employee Data: Theory And Evidence," Department of Economics - Working Papers Series 915, The University of Melbourne.
  4. Aeberhardt, Romain & Pouget, Julien, 2007. "National Origin Wage Differentials in France: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 2779, Institute for the Study of Labor (IZA).
  5. Olga Alonso-Villar & Coral del Río & Carlos Gradín, 2010. "The extent of occupational segregation in the US: Differences by race, ethnicity, and gender," Working Papers 180, ECINEQ, Society for the Study of Economic Inequality.
  6. Hipólito Simón & Esteban Sanromá & Raúl Ramos, 2008. "Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer–employee data," Spanish Economic Review, Springer, vol. 10(2), pages 135-168, June.

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