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Early Life Environment and Racial Inequality in Education and Earnings in the United States

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  • Kenneth Y. Chay
  • Jonathan Guryan
  • Bhashkar Mazumder

Abstract

Chay, Guryan and Mazumder (2009) found substantial racial convergence in AFQT and NAEP scores across cohorts born in the 1960's and early 1970's that was concentrated among blacks in the South. We demonstrated a close tracking between variation in the test score convergence across states and racial convergence in measures of health and hospital access in the years immediately after birth. This study analyzes whether the across-cohort patterns in the black-white education and earnings gaps match those in early life health and test scores already established. It also addresses caveats in the earlier study, such as unobserved selection into taking the AFQT and potential discrepancies between state-of-birth and state-of-test taking. With Census data, we find: i) a significant narrowing across the same cohorts in education gaps driven primarily by a relative increase in the probability of blacks going to college; and ii) a similar convergence in relative earnings that is insensitive to adjustments for employment selection, as well as time and age effects that vary by race and state-of-residence. The variation in racial convergence across birth states matches the patterns in the earlier study. The magnitude of the earnings gains is greater than can be explained by only the black gains in education and test scores for reasonable estimates of the returns to human capital. This suggests that other pre-market, productivity factors also improved across successive cohorts of blacks born in the South between the early 1960's and early 1970's. Finally, our cohort-based hypothesis provides a cohesive explanation for the aggregate patterns in several, previously disconnected literatures.

Suggested Citation

  • Kenneth Y. Chay & Jonathan Guryan & Bhashkar Mazumder, 2014. "Early Life Environment and Racial Inequality in Education and Earnings in the United States," NBER Working Papers 20539, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20539
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    References listed on IDEAS

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    1. Kenneth Couch, 2002. "Black-White Wage Inequality in the 1990s: a Decade of Progress," Economic Inquiry, Western Economic Association International, vol. 40(1), pages 31-41, January.
    2. 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.
    3. Donohue, John J, III & Heckman, James, 1991. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1603-1643, December.
    4. Kenneth Y. Chay & Jonathan Guryan & Bhashkar Mazumder, 2009. "Birth Cohort and the Black-White Achievement Gap: The Roles of Access and Health Soon After Birth," NBER Working Papers 15078, National Bureau of Economic Research, Inc.
    5. Jacob L. Vigdor, 2006. "The New Promised Land: Black-White Convergence in the American South, 1960-2000," NBER Working Papers 12143, National Bureau of Economic Research, Inc.
    6. 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.
    7. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    8. Cook, Michael D & Evans, William N, 2000. "Families or Schools? Explaining the Convergence in White and Black Academic Performance," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 729-754, October.
    9. Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
    10. Kane, Thomas J, 1994. "College Entry by Blacks since 1970: The Role of College Costs, Family Background, and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 878-911, October.
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    Cited by:

    1. William J. Collins & Michael Q. Moody, 2017. "Racial Differences in American Women's Labor Market Outcomes: A Long-Run View," NBER Working Papers 23397, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • 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

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