The Racial Wage Gap: The Importance of Labor Force Attachment Differences
AbstractLabor market attachment differs significantly across black, Mexican and white men; black and Mexican men are more likely to experience unemployment and out of the labor force spells than are white men. While it has long been agreed that potential experience is a poor proxy of actual experience for women, many view it as an acceptable approximation for men. Using the NLSY, this paper documents the substantial difference between potential and actual experience for both black and Mexican men. We show that the fraction of the black/white and Mexican/white wage gaps that are explained by differences in potential experience are very different than the fraction of the racial wage gaps that are explained by actual (real) experience differences. We further show that the fraction of the racial wage gap explained by education is substantially overstated when potential experience is used instead of actual experience.
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Bibliographic InfoPaper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt7cb6q4m9.
Date of creation: 01 Nov 2002
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Racial Wage Gap; Labor Force; Attachment Differences;
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