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Can Education Reduce or Mitigate Discrimination? An Investigation on Earnings of PhD Recipients in the US

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  • Wei-Chiao Huang

    (Department of Economics, Western Michigan University, Kalamazoo, MI 49008, USA)

  • Qing Zang

    (Bank OZK, USA)

  • Daxue Kan

    (Nanchang Institute of Technology, China)

Abstract

Spence’s signaling model (Spence, 1973) suggests that education can signal workers’ unobserved ability to employers thereby mitigating discrimination. There have been several studies concerning education’s impact on labor market discrimination against minority or disadvantaged groups. Our approach in this inquiry is unique in that we utilize the data of PhD recipients, a group of people with the highest education attainment, to test Spence’s theory. Another novelty of this paper is that in addition to examining possible discrimination against women and foreign-born, as has been done in previous studies, we further explore possible discrimination against the physically challenged individuals. Our baseline results show conflicting results that Ph.D. education can reduce discrimination against disability and foreign-born but not against gender. Further analysis by the Blinder-Oaxaca Decomposition shows that the wage gaps of gender and disability come more from the unobserved part than the explained part, while the foreign-born wage gap come more from the observable human capital differences. Since prejudice is an unobserved factor and we know that the disadvantaged groups are likely to suffer from prejudice (Oaxaca, 1973; Blinder, 1973; Montes-Rojas et al., 2017; Deshpande and Khanna, 2018), we conjecture that prejudice might be attributable to the unexplained part of the wage gaps. Furthermore, prejudice might be deeply rooted in one’s mind, thus difficult to remove even with the influence of education. Hence, our results reveal that it would be hard for Ph.D. education to eradicate the discrimination against gender and disability, but not against foreign-born.

Suggested Citation

  • Wei-Chiao Huang & Qing Zang & Daxue Kan, 2024. "Can Education Reduce or Mitigate Discrimination? An Investigation on Earnings of PhD Recipients in the US," Economic Analysis Letters, Anser Press, vol. 3(2), pages 59-73, June.
    • Handle: RePEc:bba:j00004:v:3:y:2024:i:2:p:59-73:d:302
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    References listed on IDEAS

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    1. George J. Borjas, 2009. "Immigration in High-Skill Labor Markets: The Impact of Foreign Students on the Earnings of Doctorates," NBER Chapters, in: Science and Engineering Careers in the United States: An Analysis of Markets and Employment, pages 131-161, National Bureau of Economic Research, Inc.
    2. Jeffrey Grogger & Gordon Hanson, 2013. "The Scale and Selectivity of Foreign-Born PhD Recipients in the US," American Economic Review, American Economic Association, vol. 103(3), pages 189-192, May.
    3. Andrew S. Hanks & Kevin M. Kniffin, 2014. "Early career PhD salaries: the industry premium and interdisciplinary debate," Applied Economics Letters, Taylor & Francis Journals, vol. 21(18), pages 1277-1282, December.
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