Wages, Sorting on Skill, and the Racial Composition of Jobs
Year: 2004
Type: article
Study design: Observational Study
Abstract: Wages for black and white workers are substantially lower in occupations with a high densityof black employees, following standard controls. Such correlations can exist absentdiscrimination or as a result of discrimination. In wage level equations, the magnitude of thecorrelation falls sharply after controlling for occupational skills. Longitudinal estimatesaccounting for worker heterogeneity indicate little if any wage change associated withchanges in racial composition. Results support a quality sorting explanation, with racialdensity serving as an index of unmeasured skills. Although past discrimination helpsdetermine the present pattern of job sorting, current discrimination cannot explain therelationship between wages and racial density. Current discrimination reflected in racial wagegaps occurs within occupations or across occupations in a manner uncorrelated with racialcomposition.
Source: Journal of Labor Economics
DOI: 10.1086/380407
Authors: Barry T. Hirsch, David A. Macpherson
Institutions: IZA - Institute of Labor Economics, Florida State University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3123844064