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Wages, Sorting on Skill, and the Racial Composition of Jobs

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Author Info
Hirsch, Barry T. () (Trinity University and IZA Bonn)
Macpherson, David A. (Florida State University)

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Abstract

Wages for black and white workers are substantially lower in occupations with a high density of black employees, following standard controls. Such correlations can exist absent discrimination or as a result of discrimination. In wage level equations, the magnitude of the correlation falls sharply after controlling for occupational skills. Longitudinal estimates accounting for worker heterogeneity indicate little if any wage change associated with changes in racial composition. Results support a “quality sorting” explanation, with racial density serving as an index of unmeasured skills. Although past discrimination helps determine the present pattern of job sorting, current discrimination cannot explain the relationship between wages and racial density. Current discrimination reflected in racial wage gaps occurs within occupations or across occupations in a manner uncorrelated with racial composition.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 741.

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Length: 23 pages
Date of creation: Mar 2003
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Handle: RePEc:iza:izadps:dp741

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Related research
Keywords: discrimination; racial composition; skill sorting;

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Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J7 - Labor and Demographic Economics - - Labor Discrimination

This paper has been announced in the following NEP Reports:

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.:
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    Other versions:
  3. Cook, Michael D & Evans, William N, 2000. "Families or Schools? Explaining the Convergence in White and Black Academic Performance," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 729-54, October. [Downloadable!] (restricted)
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Full references

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. Hipólito Simón & Esteban Sanromá & Raúl Ramos, 2008. "Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer–employee data," Spanish Economic Review, Springer, vol. 10(2), pages 135-168, June. [Downloadable!] (restricted)
  2. Judith Hellerstein & David Neumark, 2007. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 07-02, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  3. Paul Frijters & Michael A. Shields & Nikolaos Theodoropoulos & Stephen Wheatley Price, 2004. "Testing For Employee Discrimination Using Matched Employer-Employee Data: Theory And Evidence," Department of Economics - Working Papers Series 915, The University of Melbourne. [Downloadable!]
    Other versions:
  4. Romain Aeberhardt & Julien Pouget, 2007. "National Origin Wage Differentials in France: Evidence from Matched Employer-Employee Data," IZA Discussion Papers 2779, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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