Changing Wage Structure and Black-White Differentials Among Men and Women: A Longitudinal Analysis
AbstractDespite several decades of research there is still widespread disagreement over the interpretation of the wage differences between black and white workers. Do the differences reflect productivity differences, discrimination, or both? If lower black earnings reflect a productivity difference, then an economy-wide increase in the relative wages of more highly-skilled workers should lead to a parallel increase in the black-white earnings gap. We evaluate this hypothesis using longitudinal data for men and women from the Panel Study of Income Dynamics. Our findings suggest that returns to observed and unobserved skills of male workers rose by 5-10 percent between 1979 and 1985. For female workers, the return to observed skills was relatively constant while the return to unobserved skills increased by 15 percent. The evidence that black-white wage differentials rise with the return to skill is mixed. Among female workers the black-white wage gap widened in the early 1980s -- consistent with the premise that racial wage differences reflect a productivity difference. For men in our sample the black-white wage gap declined between 1979 and 1985 -- a change that is inconsistent with the rise in the return for skills.
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 4755.
Date of creation: May 1994
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
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
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.:
- Murphy, Kevin M & Welch, Finis, 1993. "Inequality and Relative Wages," American Economic Review, American Economic Association, vol. 83(2), pages 104-09, May.
- Bound, John & Freeman, Richard B, 1992.
"What Went Wrong? The Erosion of Relative Earnings and Employment among Young Black Men in the 1980s,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(1), pages 201-32, February.
- John Bound & Richard B. Freeman, 1991. "What Went Wrong? The Erosion of Relative Earnings and Employment Among Young Black Men in the 1980s," NBER Working Papers 3778, National Bureau of Economic Research, Inc.
- Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988.
"Estimating Vector Autoregressions with Panel Data,"
Econometric Society, vol. 56(6), pages 1371-95, November.
- Tom Doan, . "RATS program to demonstrate IV estimation of VAR in panel data," Statistical Software Components RTZ00185, Boston College Department of Economics.
- Kevin Murphy & Mark Plant & Finis Welch, 1984. "Cohort Size and Earnings," UCLA Economics Working Papers 352, UCLA Department of Economics.
- Gallant, A. Ronald & Jorgenson, Dale W., 1979. "Statistical inference for a system of simultaneous, non-linear, implicit equations in the context of instrumental variable estimation," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 275-302.
- Blau, Francine D & Beller, Andrea H, 1992.
"Black-White Earnings over the 1970s and 1980s: Gender Differences in Trends,"
The Review of Economics and Statistics,
MIT Press, vol. 74(2), pages 276-86, May.
- Francine D. Blau & Andrea H. Beller, 1991. "Black-White Earnings Over the 1970s and 1980s: Gender Differences in Trends," NBER Working Papers 3736, National Bureau of Economic Research, Inc.
- Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
- Smith, James P, 1993. "Affirmative Action and the Racial Wage Gap," American Economic Review, American Economic Association, vol. 83(2), pages 79-84, May.
- Borghans,Lex & Weel,Bas,ter & Weinberg,Bruce, 2005.
"People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups,"
002, Maastricht : ROA, Research Centre for Education and the Labour Market.
- Borghans, Lex & ter Weel, Bas & Weinberg, Bruce A., 2005. "People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups," IZA Discussion Papers 1494, Institute for the Study of Labor (IZA).
- Lex Borghans & Bas ter Weel & Bruce A. Weinberg, 2006. "People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups," NBER Working Papers 11985, National Bureau of Economic Research, Inc.
- Borghans,Lex & Weel,Bas,ter & Weinberg,Bruce A., 2005. "People People: Social Capital and the Labor-Market - Outcomes of Underrepresented Groups," Research Memoranda 002, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- Bas ter Weel & Lex Borghans & Bruce A. Weinberg, 2013. "People Skills and the Labor-Market Outcomes of Underrepresented Groups," CPB Discussion Paper 253, CPB Netherlands Bureau for Economic Policy Analysis.
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.