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Race, culture, and skill: interracial wage differentials among African Americans, Latinos, and whites

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  • Mason, Patrick L.

Abstract

This article examines the interrelationships among race, culture, skill, and the distribution of wages. I utilize a three-equation system to explore this process: skill is a multidimensional productive attribute measured by years of education and work effort; educational attainment is a function of class background and individual effort; and individual wage rates are a function of skill and class background. By further assuming that effort is differentially distributed across individuals and social groups, I am able to estimate reduced form equations for educational and earnings attainment, where both equations are functions of the class backgrounds and race of individuals. The collective results of this article challenge the conventional wisdom among economists that African American and Latino job skills are of a lower quality than white job skills. To the extent that effort is an important element of worker skill, our results suggest that neither African American nor Latino labor is of lower quality than white labor. The results regarding differences between African Americans and whites in educational attainment, i.e., African Americans are able to translate a given level of resources into higher levels of educational attainment, reaffirm previous findings in the literature. The results on Latino versus white educational attainment are novel. Additionally, unlike previous research, this article connects racial differences in the skill acquisition process to the economics of discrimination.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11329.

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Date of creation: 1997
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Publication status: Published in Review of Black Political Economy 3.25(1997): pp. 5-39
Handle: RePEc:pra:mprapa:11329

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Keywords: African American; Latino; Hispanic; discrimination; culture; social capital; culture; effort; education; skill;

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References

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  1. Michael Boozer & Cecilia Rouse, 1995. "Intraschool Variation in Class Size: Patterns and Implications," NBER Working Papers 5144, National Bureau of Economic Research, Inc.
  2. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, Elsevier, vol. 61(1), pages 5-21, March.
  3. Hirsch, B.T. & Macpherson, D.A., 1994. "Wages, Racial Composition, and Quality Sorting in Labor Markets," Working Papers, Department of Economics, Florida State University 1994_01_01, Department of Economics, Florida State University.
  4. Smith, James P, 1984. "Race and Human Capital," American Economic Review, American Economic Association, American Economic Association, vol. 74(4), pages 685-98, September.
  5. John J. Donohue III & James Heckman, 1991. "Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," NBER Working Papers 3894, National Bureau of Economic Research, Inc.
  6. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 45(1), pages 1-22, January.
  7. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
  8. Currie, J. & Thomas, D., 1995. "Nature vs. Nurture? The Bell Curve and Children's Cognitive Achievement," Papers, RAND - Labor and Population Program 95-19, RAND - Labor and Population Program.
  9. Barry T. Hirsch & Edward J. Schumacher, 1992. "Labor Earnings, Discrimination, and the Racial Composition of Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 602-628.
  10. Derek A. Neal & William R. Johnson, 1995. "The Role of Pre-Market Factors in Black-White Wage Differences," NBER Working Papers 5124, National Bureau of Economic Research, Inc.
  11. M. Anne Hill & June O'Neill, 1994. "Family Endowments and the Achievement of Young Children with Special Reference to the Underclass," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1064-1100.
  12. O'Neill, June, 1990. "The Role of Human Capital in Earnings Differences between Black and White Men," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 25-45, Fall.
  13. Bowles, Samuel, 1972. "Schooling and Inequality from Generation to Generation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 80(3), pages S219-S51, Part II, .
  14. Linda Datcher-Loury & Glenn Loury, 1986. "The Effects of Attitudes and Aspirations on the Labor Supply of Young Men," NBER Chapters, in: The Black Youth Employment Crisis, pages 377-401 National Bureau of Economic Research, Inc.
  15. Goldsmith, Arthur H & Veum, Jonathan R & Darity, William, Jr, 1997. "The Impact of Psychological and Human Capital on Wages," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 35(4), pages 815-29, October.
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Cited by:
  1. Nekby, Lena & Rödin, Magnus, 2010. "Acculturation identity and employment among second and middle generation immigrants," Journal of Economic Psychology, Elsevier, Elsevier, vol. 31(1), pages 35-50, February.

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