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Racial Disparities in Job Finding and Offered Wages

Author

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  • Roland G. Fryer, Jr.
  • Devah Pager
  • Jörg L. Spenkuch

Abstract

The extent to which discrimination can explain racial wage gaps is one of the most divisive issues in the social sciences. Using a newly available data set, this paper develops a simple empirical test that, under plausible (but not innocuous) conditions, provides a lower bound on the extent of discrimination in the labor market. Taken at face value, our estimates imply that differential treatment accounts for at least one-third of the black-white wage gap. We argue that the patterns in our data are most naturally rationalized through a search-matching model in which employers statistically discriminate on the basis of race when hiring unemployed workers but learn about their marginal product over time.

Suggested Citation

  • Roland G. Fryer, Jr. & Devah Pager & Jörg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633-689.
  • Handle: RePEc:ucp:jlawec:doi:10.1086/673323
    DOI: 10.1086/673323
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    3. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
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    5. Andreas Leibbrandt & John A. List, 2018. "Do Equal Employment Opportunity Statements Backfire? Evidence From A Natural Field Experiment On Job-Entry Decisions," NBER Working Papers 25035, National Bureau of Economic Research, Inc.
    6. Nunley John M. & Pugh Adam & Romero Nicholas & Seals R. Alan, 2015. "Racial Discrimination in the Labor Market for Recent College Graduates: Evidence from a Field Experiment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1093-1125, July.
    7. Bruno Decreuse & Linas Tarasonis, 2016. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Working Papers halshs-01327961, HAL.
    8. Neli Demireva & Anthony Heath, 2017. "Minority Embeddedness and Economic Integration: Is Diversity or Homogeneity Associated with Better Employment Outcomes?," Social Inclusion, Cogitatio Press, vol. 5(1), pages 20-31.
    9. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    10. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.
    11. Amon Emeka, 2018. "Where Race Matters Most: Measuring the Strength of Association Between Race and Unemployment Across the 50 United States," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(2), pages 557-573, April.
    12. J. Ignacio Conde-Ruiz & Juan José Ganuza & Paola Profeta, 2021. "Statistical Discrimination and Committees," Working Papers 2021-06, FEDEA.
    13. Lily Hu & Yiling Chen, 2017. "A Short-term Intervention for Long-term Fairness in the Labor Market," Papers 1712.00064, arXiv.org, revised Feb 2018.
    14. Catherine Ris, 2013. "Les inégalités ethniques dans l'accès à l'emploi en Nouvelle-Calédonie," Économie et Statistique, Programme National Persée, vol. 464(1), pages 59-72.
    15. Winters, John V. & Hirsch, Barry, 2012. "An Anatomy of Racial and Ethnic Trends in Male Earnings," IZA Discussion Papers 6766, Institute of Labor Economics (IZA).
    16. Catherine Ris & Samuel Gorohouna, 2013. "Decomposing differences in employment outcomes between Kanak and other New Caledonians - how important is the role of school achievement?," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(1), pages 115-135.
    17. Hengel, E., 2017. "Publishing while Female. Are women held to higher standards? Evidence from peer review," Cambridge Working Papers in Economics 1753, Faculty of Economics, University of Cambridge.
    18. Tymon Słoczyński, 2020. "Average Gaps and Oaxaca–Blinder Decompositions: A Cautionary Tale about Regression Estimates of Racial Differences in Labor Market Outcomes," ILR Review, Cornell University, ILR School, vol. 73(3), pages 705-729, May.
    19. Hong, Jieying & Zhang, Rui, 2021. "Socialization, job search and integration," Economic Modelling, Elsevier, vol. 101(C).
    20. William Darity, 2013. "Confronting those affirmative action grumbles," Chapters, in: Jeannette Wicks-Lim & Robert Pollin (ed.), Capitalism on Trial, chapter 14, Edward Elgar Publishing.
    21. Goran Dominioni & Addolorata Marasco & Alessandro Romano, 2018. "A mathematical approach to study and forecast racial groups interactions: deterministic modeling and scenario method," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(4), pages 1929-1956, July.
    22. Jonsson, Kenisha Russell & Demireva, Neli, 2018. "Does the ethno-religious diversity of a neighbourhood affect the perceived health of its residents?," Social Science & Medicine, Elsevier, vol. 204(C), pages 108-116.
    23. John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2014. "An Examination of Racial Discrimination in the Labor Market for Recent College Graduates: Estimates from the Field," Auburn Economics Working Paper Series auwp2014-06, Department of Economics, Auburn University.
    24. Selim Jahan, 2017. "Human Development Report 2016 - Human Development for Everyone," Working Papers id:12021, eSocialSciences.

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    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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