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Statistical Discrimination and the Early Career Evolution of the Black-White Wage Gap

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  • Oettinger, Gerald S

Abstract

This article develops and tests a simple dynamic model of statistical discrimination. The model improves on earlier static models both by allowing ex ante uncertainty about worker productivity to be resolved as on-the-job performance is observed and by generating several testable empirical implications. These predictions are tested using a sample of young men from the National Longitudinal Survey of Youth, producing mixed evidence for the model. The main empirical result is that no black-white wage gap exists at labor-force entry but that one develops as experience accumulates, mainly because blacks reap smaller gains from job mobility. Copyright 1996 by University of Chicago Press.

Suggested Citation

  • Oettinger, Gerald S, 1996. "Statistical Discrimination and the Early Career Evolution of the Black-White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 52-78, January.
  • Handle: RePEc:ucp:jlabec:v:14:y:1996:i:1:p:52-78
    DOI: 10.1086/209803
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    References listed on IDEAS

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    1. Kevin Lang, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 363-382.
    2. Paul Milgrom & Sharon Oster, 1987. "Job Discrimination, Market Forces, and the Invisibility Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 102(3), pages 453-476.
    3. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-452, June.
    4. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    5. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    6. Rothschild, Michael & Stiglitz, Joseph E., 1982. "A model of employment outcomes illustrating the effect of the structure of information on the level and distribution of income," Economics Letters, Elsevier, vol. 10(3-4), pages 231-236.
    7. Lazear, Edward, 1979. "The Narrowing of Black-White Wage Differentials Is Illusory," American Economic Review, American Economic Association, vol. 69(4), pages 553-564, September.
    8. William R. Johnson, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, Oxford University Press, vol. 92(2), pages 261-277.
    9. Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
    10. Hoffman, Saul D, 1979. "Black-White Life Cycle Earnings Differences and the Vintage Hypothesis: A Longitudinal Analysis," American Economic Review, American Economic Association, vol. 69(5), pages 855-867, December.
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