Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination

Kerwin Kofi Charles and Jonathan Guryan

Journal of Political Economy, 2008, vol. 116, issue 5, 773-809

Abstract: We test the predictions from Becker's (1957) seminal work on employer prejudice and find that relative black wages (a) vary negatively with the prejudice of the "marginal" white in a state, (b) vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state, and (c) vary negatively with the fraction of a state that is black. Our estimates suggest that one-quarter of the racial wage gap is due to prejudice, with nontrivial consequences for black lifetime earnings. (c) 2008 by The University of Chicago. All rights reserved.

Date: 2008
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