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'Soft' Skills, 'Hard' Skills, and the Black/White Earnings Gap

Author

Listed:
  • Fan, C. Simon

    (Lingnan University)

  • Wei, Xiangdong

    (Lingnan University)

  • Zhang, Junsen

    (Zhejiang University)

Abstract

This paper provides both a theoretical and an empirical investigation into the impact of job skill types on the black/white pay differentials. The theoretical analysis derives that the more intensively "soft"/"hard" skills are used in an occupation, the greater/smaller the black/white pay differential is there in that occupation. Moreover, in response to the differential pay gaps across jobs requiring different levels of "soft"/"hard" skills, blacks are more likely to self-select themselves into the jobs that use "hard" skills more intensively, ceteris paribus. Using NLSY data, we find consistent empirical evidence to our theoretical predictions. Hence, the paper bridges the existing literature on racial pay gaps and cognitive vs. non-cognitive skills by explicitly testing the impact of job skill types on racial pay gaps.

Suggested Citation

  • Fan, C. Simon & Wei, Xiangdong & Zhang, Junsen, 2005. "'Soft' Skills, 'Hard' Skills, and the Black/White Earnings Gap," IZA Discussion Papers 1804, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp1804
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    References listed on IDEAS

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    1. Michael Rosholm & Marianne Røed & Pål Schøne, 2013. "Are new work practices and new technologies biased against immigrant workers?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(8), pages 995-1014, November.

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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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