Earnings Capacity and the Trend in Inequality among Black Men

Saul Schwartz

Journal of Human Resources, 1986, vol. 21, issue 1, 44-63

Abstract: The major purpose of this article is to estimate the potential earnings of black men supposing that they were to work full time, full year-that is, at their earnings capacity-at two widely separated points in time. The effect of changes in earnings capacity on changes in the distribution of annual earnings is then computed. In both 1967 and 1979, roughly three-quarters of the inequality in observed earnings is due to differences in earnings capacity. But about two-thirds of the change in inequality for black men is due to changes in employment status, while the remaining one-third is due to changes in earnings capacity.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:21:y:1986:i:1:p:44-63

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