The role of location in evaluating racial wage disparity
AbstractA standard object of empirical analysis in labor economics is a modified Mincer wage function in which an individual's log wage is specified to be a function of education, experience, and an indicator variable identifying race. Researchers hope that estimates from this exercise can be informative about the impact of minority status on labor market success. Here we set out a theoretical justification for this regression in a context in which individuals live and work in different locations. Our model leads to the traditional approach, but with the important caveat that the regression should include location-specific fixed effects. Given this insight, we reevaluate evidence about the black-white wage disparity in the United States.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2009-043.
Date of creation: 2009
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Other versions of this item:
- Dan Black & Natalia Kolesnikova & Seth Sanders & Lowell Taylor, 2013. "The role of location in evaluating racial wage disparity," IZA Journal of Labor Economics, Springer, vol. 2(1), pages 1-18, December.
- NEP-ALL-2009-09-26 (All new papers)
- NEP-LAB-2009-09-26 (Labour Economics)
- NEP-URE-2009-09-26 (Urban & Real Estate Economics)
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