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What Do Wage Differentials Tell Us about Labor Market Discrimination?

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  • June E. O'Neill
  • Dave M. O'Neill

Abstract

We examine the extent to which non-discriminatory factors can explain observed wage gaps between racial and ethnic minorities and whites, and between women and men. In general we find that differences in productivity-related factors account for most of the between group wage differences in the year 2000. Determinants of wage gaps differ by group. Differences in schooling and in skills developed in the home and in school, as measured by test scores, are of central importance in explaining black/white and Hispanic/white wage gaps among both women and men. Immigrant assimilation is an additional factor for Asians and workers from Central and South America. The sources of the gender gap are quite different, however. Gender differences in schooling and cognitive skills as measured by the AFQT are quite small and explain little of the pay gap. Instead the gender gap largely stems from choices made by women and men concerning the amount of time and energy devoted to a career, as reflected in years of work experience, utilization of part-time work, and other workplace and job characteristics.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11240.

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Date of creation: Apr 2005
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Handle: RePEc:nbr:nberwo:11240

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References

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  1. Sanders Korenman & David Neumark, 1991. "Does Marriage Really Make Men More Productive?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 282-307.
  2. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section..
  3. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
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Cited by:
  1. David Bravo & Claudia Sanhueza & Sergio Urzua, 2008. "Discriminación en el mercado laboral entre profesionales de Chile. Abogados, Médicos y gente de negocios," Research Department Publications 3249, Inter-American Development Bank, Research Department.
  2. David Bravo & Claudia Sanhueza & Sergio Urzua, 2008. "Is There Labor Market Discrimination among Professionals in Chile? Lawyers, Doctors and Businesspeople," Research Department Publications 3248, Inter-American Development Bank, Research Department.
  3. Francesco Renna & Randall King, 2007. "The Impact of Racial Discrimination on the Early Career Outcomes of Young Men," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(3), pages 269-278, September.
  4. Hélène Périvier, 2008. "Les femmes sur le marché du travail aux États-Unis," Documents de Travail de l'OFCE 2008-12, Observatoire Francais des Conjonctures Economiques (OFCE).
  5. Hélène Perivier, 2007. "Les femmes sur le marché du travail aux États-Unis - Une mise en perspective avec la France et la Suède," Documents de Travail de l'OFCE 2007-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  6. Chiappori, Pierre-André & Iyigun, Murat & Weiss, Yoram, 2006. "Investment in Schooling and the Marriage Market," IZA Discussion Papers 2454, Institute for the Study of Labor (IZA).
  7. Chad R. Wilkerson & Megan D. Williams, 2006. "Minority workers in the Tenth District: rising presence, rising challenges," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 31-59.

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