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Does Wealth Explain Black-White Differences In Early Employment Careers?

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  • Sílvio Rendon

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Abstract

This paper inquires on the effect of initial wealth in racial differences in early employment careers. I set up a dynamic model in which people simultaneously search for a job and accumulate wealth, and fit it to data from the National Longitudinal Survey (1979-cohort). With the recovered behavioral parameters, I perform regime changes consisting in giving blacks (i) the initial wealth distribution, and (ii) the arrival rates and wage offer distribution of whites. These counterfactual experiments show that initial wealth has a modest influence in the black-white difference in early employment careers in comparison with labor market variables.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we032303.

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Date of creation: Apr 2003
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Handle: RePEc:cte:werepe:we032303

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  2. Joseph G. Altonji & Ulrich Doraszelski & Lewis Segal, 2000. "Black/white differences in wealth," Economic Perspectives, Federal Reserve Bank of Chicago, Federal Reserve Bank of Chicago, issue Q I, pages 38-50.
  3. Audra J. Bowlus & Zvi Eckstein, 1998. "Discrimination and Skill Differences in an Equilibrium Search Model," UWO Department of Economics Working Papers, University of Western Ontario, Department of Economics 9802, University of Western Ontario, Department of Economics.
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  7. Michael P. Keane & Kenneth Wolpin, . "Eliminating Race Differences in School Attainment and Labor Market Success," CARESS Working Papres, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences 97-5, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
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  16. Lazear, Edward, 1979. "The Narrowing of Black-White Wage Differentials Is Illusory," American Economic Review, American Economic Association, American Economic Association, vol. 69(4), pages 553-64, September.
  17. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
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  20. Joseph G. Altonji & Ulrich Doraszelski, 2005. "The Role of Permanent Income and Demographics in Black/White Differences in Wealth," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
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  22. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Estimating The Effect Of Racial Discrimination On First Job Wage Offers," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 384-392, August.
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Cited by:
  1. Silvio Rendon & Alfredo Cuecuecha, 2007. "International Job Search: Mexicans in and out of the US," Department of Economics Working Papers, Stony Brook University, Department of Economics 07-09, Stony Brook University, Department of Economics.
  2. Maury Gittleman, 2011. "Medicaid and Wealth: An Examination Using the NLSY79," Working Papers, U.S. Bureau of Labor Statistics 448, U.S. Bureau of Labor Statistics.
  3. Ivan Grguric, 2005. "Moving up the income ladder? What are the obstacles: a case study of indigenous people in Latin America," Financial Theory and Practice, Institute of Public Finance, Institute of Public Finance, vol. 29(4), pages 361-381.

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