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The Racial Wage Gap: The Importance of Labor Force Attachment Differences

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  • Antecol, Heather
  • Bedard, Kelly

Abstract

Labor market attachment differs significantly across black, Mexican and white men; black and Mexican men are more likely to experience unemployment and out of the labor force spells than are white men. While it has long been agreed that potential experience is a poor proxy of actual experience for women, many view it as an acceptable approximation for men. Using the NLSY, this paper documents the substantial difference between potential and actual experience for both black and Mexican men. We show that the fraction of the black/white and Mexican/white wage gaps that are explained by differences in potential experience are very different than the fraction of the racial wage gaps that are explained by actual (real) experience differences. We further show that the fraction of the racial wage gap explained by education is substantially overstated when potential experience is used instead of actual experience.

Suggested Citation

  • Antecol, Heather & Bedard, Kelly, 2002. "The Racial Wage Gap: The Importance of Labor Force Attachment Differences," University of California at Santa Barbara, Economics Working Paper Series qt7cb6q4m9, Department of Economics, UC Santa Barbara.
  • Handle: RePEc:cdl:ucsbec:qt7cb6q4m9
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    References listed on IDEAS

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    1. Heather Antecol & Kelly Bedard, 2002. "The Relative Earnings of Young Mexican, Black, and White Women," ILR Review, Cornell University, ILR School, vol. 56(1), pages 122-135, October.
    2. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-130, April.
    3. David Card & Alan B. Krueger, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 151-200.
    4. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    5. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    6. Marjorie L. Baldwin & William G. Johnson, 1996. "The Employment Effects of Wage Discrimination against Black Men," ILR Review, Cornell University, ILR School, vol. 49(2), pages 302-316, January.
    7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    8. Trejo, Stephen J, 1997. "Why Do Mexican Americans Earn Low Wages?," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1235-1268, December.
    9. Nan L. Maxwell, 1994. "The Effect on Black-White Wage Differences of Differences in the Quantity and Quality of Education," ILR Review, Cornell University, ILR School, vol. 47(2), pages 249-264, January.
    10. Grogger, Jeff, 1996. "Does School Quality Explain the Recent Black/White Wage Trend?," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 231-253, April.
    11. Dan Black & Amelia Haviland & Seth Sanders & Lowell Taylor, 2006. "Why Do Minority Men Earn Less? A Study of Wage Differentials among the Highly Educated," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 300-313, May.
    12. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-895, October.
    13. Moon-Kak Kim & Solomon W. Polachek, 1994. "Panel Estimates of Male-Female Earnings Functions," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 406-428.
    14. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-564, June.
    15. Gregory Defreitas, 1986. "A Time-Series Analysis of Hispanic Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 24-43.
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