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The Racial Wage Gap: The Importance of Labor Force Attachment Differences Across Black, Mexican and White Men

  • Heather Antecol

    (Claremont McKenna College)

  • Kelly Bedard

    (UC - Santa Barbara)

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.

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Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2001-35.

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Date of creation: Nov 2001
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Handle: RePEc:clm:clmeco:2001-35
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  1. Stephen J. Trejo, 2003. "Intergenerational Progress of Mexican-Origin Workers in the U.S. Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
  2. Heather Antecol & Kelly Bedard, 2002. "The Relative earnings of young Mexican, black, and white women," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(1), pages 122-135, October.
  3. Nan L. Maxwell, 1994. "The effect on black-white wage differences of differences in the quantity and quality of education," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 249-264, January.
  4. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Barsky R. & Bound J. & Charles K.K. & Lupton J.P., 2002. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 663-673, September.
  6. Card, David & Krueger, Alan B, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 151-200, February.
  7. 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.
  8. Polachek, Solomon W. & Kim, Moon-Kak, 1994. "Panel estimates of the gender earnings gap : Individual-specific intercept and individual-specific slope models," Journal of Econometrics, Elsevier, vol. 61(1), pages 23-42, March.
  9. Marjorie Baldwin & William G. Johnson, 1996. "The employment effects of wage discrimination against black men," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(2), pages 302-316, January.
  10. 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.
  11. 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.
  12. Gregory Defreitas, 1986. "A Time-Series Analysis of Hispanic Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 24-43.
  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. Derek A. Neal & William R. Johnson, 1995. "The Role of Pre-Market Factors in Black-White Wage Differences," NBER Working Papers 5124, National Bureau of Economic Research, Inc.
  15. 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.
  16. Wolpin, Kenneth I, 1992. "The Determinants of Black-White Differences in Early Employment Careers: Search, Layoffs, Quits, and Endogenous Wage Growth," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 535-60, June.
  17. Bernt Bratsberg & Dek Terrell, 1998. "Experience, Tenure, and Wage Growth of Young Black and White Men," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 658-682.
  18. 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 231-53, April.
  19. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-64, June.
  20. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
  21. 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.
  22. Trejo, Stephen J, 1997. "Why Do Mexican Americans Earn Low Wages?," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1235-68, December.
  23. Bruce Western & Becky Pettit, 2000. "Incarceration and racial inequality in men's employment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(1), pages 3-16, October.
  24. 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.
  25. 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 101-30, April.
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