Racial Inequality in the Uruguayan Labor Market:An analysis of wage differentials between Afrodescendants and whites

Latin America is a region of sharp inequalities that are far from ethnically blind. In particular, there exists a significant socioeconomic gap between Latin Americans of European and the Afrodescendant and Indigenouos populations. Uruguay has usually been considered an exception to this pattern, although the lack of survey data about racial descent and ethnicity did not allow empirical analysis. In 2006, the National Institute of Statistics included a question on racial descent in the Household Survey. In this paper we use these microdata (for the first time) to analyze the wage gap between afro-descendants and whites. The wage ratio is 0.72 for men and 0.78 for women. For each sex, we perform OLS estimations, wage decompositions and quantile regressions. The estimations indicate that discrimination contributes to explain half of the average wage gap of men and 20% of the gap among femles. Part of discrimination works through the placement of Afro-descendant workers into lower-paid occupations. The most important attribute that explains the rest of the gap is education. Finally, quantile regressions show that discrimination declines with percentile.