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Persistent Racial Wage Inequality

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Author Info
Kate Antonovics

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Abstract

This paper attempts to understand the forces that have lead to persistent racial wage inequality by developing a dynamic model of statistical discrimination that accounts for the transmission of earnings across generations. The parameters of this model are then estimated using data from the 1970 and 1990 U.S. Census. The results indicate that racial disparities in the quality of information that firms receive about worker productivity are the primary cause of racial wage inequality in 1990. The results also indicate that neither the persistence of income across generations nor the presence of coordination failures explains a sizable fraction of ongoing inequality.

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Paper provided by Department of Economics, UC San Diego in its series University of California at San Diego, Economics Working Paper Series with number 2002-05.

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Date of creation: Feb 2002
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Handle: RePEc:cdl:ucsdec:2002-05

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Card, David & Lemieux, Thomas, 1996. "Wage dispersion, returns to skill, and black-white wage differentials," Journal of Econometrics, Elsevier, vol. 74(2), pages 319-361, October. [Downloadable!] (restricted)
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  2. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September. [Downloadable!] (restricted)
  3. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
  4. 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. [Downloadable!] (restricted)
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  5. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July. [Downloadable!] (restricted)
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  6. Andrea Moro, 2003. "The Effect Of Statistical Discrimination On Black-White Wage Inequality: Estimating A Model With Multiple Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 467-500, 05. [Downloadable!] (restricted)
  7. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June. [Downloadable!] (restricted)
  8. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-47, June. [Downloadable!] (restricted)
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  9. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June. [Downloadable!] (restricted)
  10. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  11. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andrea Moro & Peter Norman, 2003. "Empirical Implications of Statistical Discrimination on the Returns to Measures of Skill," Annales d'Economie et de Statistique, ADRES, issue 71-72, pages 19, Juillet-D. [Downloadable!]
  2. Samuel Bowles & Glenn C. Loury & Rajiv Sethi, 2009. "Group Inequality," Economics Working Papers 0088, Institute for Advanced Study, School of Social Science. [Downloadable!]
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