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

  • Oettinger, Gerald S

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.

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File URL: http://dx.doi.org/10.1086/209803
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 14 (1996)
Issue (Month): 1 (January)
Pages: 52-78

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Handle: RePEc:ucp:jlabec:v:14:y:1996:i:1:p:52-78
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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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. Lazear, Edward, 1979. "The Narrowing of Black-White Wage Differentials Is Illusory," American Economic Review, American Economic Association, vol. 69(4), pages 553-64, September.
  3. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-52, June.
  4. Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
  5. 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.
  6. 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.
  7. William R. Johnson, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, Oxford University Press, vol. 92(2), pages 261-277.
  8. 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 855-67, December.
  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.
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