IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v25y2011i5p559-584.html
   My bibliography  Save this article

Black--white wage differentials: duration and probability unemployment effects in a multiple of sample selection bias model

Author

Listed:
  • John Baffoe-Bonnie
  • Anthony O. Gyapong

Abstract

The extent to which probability and duration of unemployment affect the black--white wage differentials is examined in this paper. The paper simultaneously incorporates in the wage equation the multiple sample selection bias that occurs as a result of individuals’ propensity to be in the labor force, and the firm’s hiring decisions. The results reveal a substantial contribution of the duration of unemployment variable to the black--white wage differential, but a small portion of the differential is explained by the probability of unemployment. The results also indicate a sizeable difference between the contribution of the duration of unemployment variable to the male’s wage differentials (26%) and to the female’s (35%). The study finds that an individual’s labor force decision as well as a firm’s hiring decision are important in the wage determination process and that failure to account for the sample selectivity bias due to these two decisions will result in either underestimating or overestimating the wage differentials between black and white workers. At the macro level, the results seem to suggest that promotion of racial wage equality should be associated with policies that will minimize blacks’ incidence of unemployment and duration of unemployment spells.

Suggested Citation

  • John Baffoe-Bonnie & Anthony O. Gyapong, 2011. "Black--white wage differentials: duration and probability unemployment effects in a multiple of sample selection bias model," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(5), pages 559-584, September.
  • Handle: RePEc:taf:irapec:v:25:y:2011:i:5:p:559-584
    DOI: 10.1080/02692171.2010.534439
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2010.534439
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kunze, Astrid, 2000. "The Determination of Wages and the Gender Wage Gap: A Survey," IZA Discussion Papers 193, Institute for the Study of Labor (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:kap:jrefec:v:56:y:2018:i:1:d:10.1007_s11146-016-9591-y is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:25:y:2011:i:5:p:559-584. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.