Wage Differentials Are Larger Than You Think
AbstractThis paper will employ a method (devised in Lazear  ) to estimate the unobserved component of wages. The size of this component will be calculated for non-whites and whites separately and then compared. Since, as it turns out, the component is larger for whites than non-whites, observed wage differentials understate true differentials. Furthermore, comparison of the period between1966-1969 with the 1972-1974 period reveals that this unobserved differential increased substantially over time. The results of this study suggest that although the pecuniary non-white -- white differential has narrowed substantially between 1966 and 1974 for young men, the on-the-job training differential has increased by almost the exact same amount. This implies that in real wealth terms there has not been any narrowing of the differential at all. This will become more apparent in later years as those non-whites who were hired into skilled jobs today fail to be promoted or obtain higher paying jobs elsewhere at the same rate as their white counterparts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0168.
Date of creation: Mar 1977
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
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.:
- Welch, Finis, 1973. "Black-White Differences in Returns to Schooling," American Economic Review, American Economic Association, vol. 63(5), pages 893-907, December.
- Haley, William J, 1973. "Human Capital: The Choice Between Investment and Income," American Economic Review, American Economic Association, vol. 63(5), pages 929-44, December.
- Rosen, Sherwin, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," Review of Economic Studies, Wiley Blackwell, vol. 36(106), pages 185-96, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.