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Title:Wages, Sorting on Skill, and the Racial Composition of Jobs PDF Logo
Authors:Macpherson, David A.
Hirsch, Barry T.
Issue Date:2003
Series/Report no.:IZA Discussion paper series 741
Abstract:Wages for black and white workers are substantially lower in occupations with a high density of black employees, following standard controls. Such correlations can exist absent discrimination or as a result of discrimination. In wage level equations, the magnitude of the correlation falls sharply after controlling for occupational skills. Longitudinal estimates accounting for worker heterogeneity indicate little if any wage change associated with changes in racial composition. Results support a ?quality sorting? explanation, with racial density serving as an index of unmeasured skills. Although past discrimination helps determine the present pattern of job sorting, current discrimination cannot explain the relationship between wages and racial density. Current discrimination reflected in racial wage gaps occurs within occupations or across occupations in a manner uncorrelated with racial composition.
Subjects:discrimination
racial composition
skill sorting
JEL:J7
J3
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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