The Effect of Discrimination on Earnings: Evidence from Military Test Score Results

Dave M. O'Neill

Journal of Human Resources, 1970, vol. 5, issue 4, 475-486

Abstract: The test score performance of a large sample of youth on the Armed Forces Qualification Test, cross-classified by schooling and race, was used to estimate the relative importance of current and past discrimination in explaining 1960 racial differentials in earnings. Our results indicate that, for schooling levels below college graduate, between 50 and 55 percent of the differentials were attributable to (then) current labor market discrimination and the remaining 50 to 45 percent to the lagged effect of past discrimination, both market and nonmarket. Since these results must be viewed in the context of the imperfect statistical procedure that produced them, a detailed discussion of biases is presented.

Date: 1970
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