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"Soft" Skills, "Hard" Skills, and the Black/White Earnings Gap

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Author Info

  • Fan, C. Simon

    ()
    (Lingnan University)

  • Wei, Xiangdong

    ()
    (Lingnan University)

  • Zhang, Junsen

    ()
    (Chinese University of Hong Kong)

Abstract

This paper provides both a theoretical and an empirical investigation into the impact of job skill types on the black/white pay differentials. The theoretical analysis derives that the more intensively "soft"/"hard" skills are used in an occupation, the greater/smaller the black/white pay differential is there in that occupation. Moreover, in response to the differential pay gaps across jobs requiring different levels of "soft"/"hard" skills, blacks are more likely to self-select themselves into the jobs that use "hard" skills more intensively, ceteris paribus. Using NLSY data, we find consistent empirical evidence to our theoretical predictions. Hence, the paper bridges the existing literature on racial pay gaps and cognitive vs. non-cognitive skills by explicitly testing the impact of job skill types on racial pay gaps.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1804.

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Length: 25 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1804

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Related research

Keywords: pay differentials; discrimination; hard skills; soft skills;

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References

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  1. Sawhill, Isabel V, 1988. "Poverty in the U.S.: Why Is It So Persistent?," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1073-119, September.
  2. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
  3. Chiswick, Barry R, 1988. "Differences in Education and Earnings across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality," The Quarterly Journal of Economics, MIT Press, vol. 103(3), pages 571-97, August.
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  6. Lundberg, S.J.Startz, R., 1994. "On the Persistence of Racial Inequality," Working Papers 94-07, University of Washington, Department of Economics.
  7. Carneiro, Pedro & Heckman, James & Masterov, Dimitriy, 2004. "Labor market discrimination and racial differences in premarket factors," Working Paper Series 2005:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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  9. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination And Employment Outcomes For Minority Workers," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 835-867, August.
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  12. Green, Francis & Machin, Stephen & Wilkinson, David, 1998. "The Meaning and Determinants of Skills Shortages," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 165-87, May.
  13. John Cawley & James Heckman & Edward Vytlacil, 1998. "Meritocracy in America: An Examination of Wages Within and Across Occupations," NBER Working Papers 6446, National Bureau of Economic Research, Inc.
  14. Biddle, Jeff E & Hamermesh, Daniel S, 1998. "Beauty, Productivity, and Discrimination: Lawyers' Looks and Lucre," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 172-201, January.
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  16. 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.
  17. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
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Cited by:
  1. Rosholm, Michael & Roed, Marianne & Schone, Pal, 2006. "Are New Work Practices and New Technologies Biased against Immigrant Workers?," IZA Discussion Papers 2135, Institute for the Study of Labor (IZA).

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