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Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014

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  • Patrick Bayer
  • Kerwin Kofi Charles

Abstract

This paper presents new evidence on the evolution of black-white earnings differences among all men at different points in the distribution. We study two dimensions of earnings gaps: the black-white difference in earnings; and the difference between a black man’s position in the black earnings and the position he would hold in the white distribution. After narrowing from 1940 to the mid-1970s, the median black-white earning gap has since grown as large as it was in 1950. Even as his relative earnings improved then worsened, the median black man’s relative position in the earnings distribution has remained essentially constant. Black men at higher percentiles have experienced significant gains in relative earnings since 1940. Unlike blacks at the median and below, whose relative earnings changes have been chiefly the result of narrowing and stretching of the overall earnings distribution, higher percentile blacks have also experienced significant positional gains over the past 70 years.

Suggested Citation

  • Patrick Bayer & Kerwin Kofi Charles, 2016. "Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014," NBER Working Papers 22797, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22797
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    Cited by:

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    2. Fortin, Nicole M. & Bell, Brian & Böhm, Michael, 2017. "Top earnings inequality and the gender pay gap: Canada, Sweden, and the United Kingdom," Labour Economics, Elsevier, vol. 47(C), pages 107-123.
    3. Mongoljin Batsaikhan & Mette Gørtz & John Kennes & Ran Sun Lyng & Daniel Monte & Norovsambuu Tumennasan, 2021. "Discrimination and Daycare Choice: Evidence from a Randomized Survey," CEBI working paper series 19-14, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    4. Mongoljin Batsaikhan & Mette Gørtz & John Kennes & Ran Sun Lyng & Daniel Monte & Norovsambuu Tumennasan, 2019. "Daycare Choice and Ethnic Diversity: Evidence from a Randomized Survey," Economics Working Papers 2019-02, Department of Economics and Business Economics, Aarhus University.
    5. Bidisha Lahiri, 2018. "Racial Earnings Disparities with Endogenous Labor Market Participation," Journal of Economics, Race, and Policy, Springer, vol. 1(1), pages 16-25, July.
    6. Daly, Mary C. & Hobijn, Bart & Pedtke, Joseph H., 2020. "Labor market dynamics and black–white earnings gaps," Economics Letters, Elsevier, vol. 186(C).
    7. Lars J. Lefgren & Jaren C. Pope & David P. Sims, 2019. "Contemporary State Policies and Intergenerational Income Mobility," NBER Working Papers 25896, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • 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
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-

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