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Decomposition of the Black-White Wage Differential in the Physician Market

Author

Listed:
  • Tsu-Yu Tsao
  • Andrew Pearlman

Abstract

This paper proposes a difference-in-differences strategy to decompose the contributions of various types of discrimination to the black-white wage differential. The proposed estimation strategy is implemented using data from the Young Physicians Survey. The results suggest that potential discrimination plays a small role in the racial wage gap among physicians. At most, discrimination lowers the hourly wages of black physicians by 3.3 percent. Decomposition shows that consumer discrimination accounts for all of the potential discrimination in the physician market, and that the effect of firm discrimination may actually favor black physicians. Interpretations of the estimates, however, are complicated by the possibility that, relative to white physicians, black physicians negatively self-select into self-employment.

Suggested Citation

  • Tsu-Yu Tsao & Andrew Pearlman, 2010. "Decomposition of the Black-White Wage Differential in the Physician Market," Economics Working Paper Archive wp_588, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_588
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    Keywords

    Discrimination; Physician Market; Wage Gaps;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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