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The Substitutability of Labor of Selected Ethnic Groups in the US Labor Market

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Author Info
Martin Kahanec () (IZA Bonn)

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Abstract

This paper investigates the substitutability of labor of selected ethnic groups in the US labor market. In the generalized Leontief framework, the analysis of US census-based data reveals that labor of non-White ethnic groups is complementary to that of White ethnic group. This finding supports the view that the negative relationship between the relative earnings of an ethnic group and its relative size is a labor market phenomenon. Moreover, it implies that ethnic diversity of labor force has positive effects on aggregate output. While the estimated elasticities of complementarity are relatively small, they are shown to generate significant effects, given the very uneven distribution of ethnic groups across local labor markets, as resulting from long-run migration patterns.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1945.

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Length: 29 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:iza:izadps:dp1945

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Related research
Keywords: substitutability; elasticity of substitution; ethnic group; labor market;

Other versions of this item:

Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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References listed on IDEAS
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. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June. [Downloadable!] (restricted)
  2. Grant, James H & Hamermesh, Daniel S, 1981. "Labor Market Competition among Youths, White Women and Others," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 354-60, August. [Downloadable!] (restricted)
    Other versions:
  3. George J. Borjas, 1994. "Long-Run Convergence of Ethnic Skill Differentials," NBER Working Papers 4641, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
    Other versions:
  5. Arrow, Kenneth J, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. George J. Borjas, 1994. "Long-run convergence of ethnic skill differentials: The children and grandchildren of the Great Migration," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 47(4), pages 553-573, July.
  8. Grossman, Jean Baldwin, 1982. "The Substitutability of Natives and Immigrants in Production," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 596-603, November. [Downloadable!] (restricted)
  9. George J. Borjas, 1987. "Immigrants, Minorities, and Labor Market Competition," NBER Working Papers 2028, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  11. George J. Borjas, 1987. "Immigrants, minorities, and labor market competition," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 40(3), pages 382-392, April.
  12. Hicks, John, 1970. "Elasticity of Substitution Again: Substitutes and Complements," Oxford Economic Papers, Oxford University Press, vol. 22(3), pages 289-96, November. [Downloadable!] (restricted)
  13. Borjas, George J, 1983. "The Substitutability of Black, Hispanic, and White Labor," Economic Inquiry, Oxford University Press, vol. 21(1), pages 93-106, January.
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Cited by:
(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. Bodvarsson, Örn B. & Sessions, John G., 2008. "The Measurement of Racial Discrimination in Pay between Job Categories: Theory and Test," IZA Discussion Papers 3748, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Martin Kahanec, 2006. "Ethnic Specialization and Earnings Inequality: Why Being a Minority Hurts but Being a Big Minority Hurts More," IZA Discussion Papers 2050, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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