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The Role of Premarket Factors in Black-White Wage Differences

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  • Neal, Derek A
  • Johnson, William R

Abstract

The authors regress young adult wages on current age and the score of a basic skills test that was administered over ten years earlier, when respondents were preparing to leave high school and embark on work careers or postsecondary education. Controlling for this one measure of premarket skill greatly reduces the measured black-white wage gap for young adults. The authors' results suggest that the black-white wage gap primarily reflects a black-white skill gap that exists before young men and women enter the labor market. This skill gap in part reflects measured black-white differences in wealth and family background. Copyright 1996 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 104 (1996)
Issue (Month): 5 (October)
Pages: 869-95

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Handle: RePEc:ucp:jpolec:v:104:y:1996:i:5:p:869-95

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  1. Richard Butler & James J. Heckman, 1977. "The Government's Impact on the Labor Market Status of Black Americans: A Critical Review," NBER Working Papers 0183, National Bureau of Economic Research, Inc.
  2. Mary Corcoran & Greg J. Duncan, 1979. "Work History, Labor Force Attachment, and Earnings Differences between the Races and Sexes," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 3-20.
  3. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
  4. Grogger, Jeff, 1996. "Does School Quality Explain the Recent Black/White Wage Trend?," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 231-53, April.
  5. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
  6. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  7. Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
  8. Michael A. Boozer & Alan B. Krueger & Shari Wolkon, 1992. "Race and School Quality Since Brown vs. Board of Education," NBER Working Papers 4109, National Bureau of Economic Research, Inc.
  9. John Bound & David A. Jaeger & Regina Baker, 1993. "The Cure Can Be Worse than the Disease: A Cautionary Tale Regarding Instrumental Variables," NBER Technical Working Papers 0137, National Bureau of Economic Research, Inc.
  10. O'Neill, June, 1990. "The Role of Human Capital in Earnings Differences between Black and White Men," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 25-45, Fall.
  11. Card, David & Krueger, Alan B, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 151-200, February.
  12. John J. Donohue III & James Heckman, 1991. "Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," NBER Working Papers 3894, National Bureau of Economic Research, Inc.
  13. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  14. Nan L. Maxwell, 1994. "The effect on black-white wage differences of differences in the quantity and quality of education," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 249-264, January.
  15. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
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