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"Soft" Skills, "Hard" Skills, and the Black/White Earnings Gap

C. Fan (), Xiangdong Wei () and Junsen Zhang

No 1804, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides both a theoretical and an empirical investigation into the impact of job skill types on the black/white pay differentials. The theoretical analysis derives that the more intensively "soft"/"hard" skills are used in an occupation, the greater/smaller the black/white pay differential is there in that occupation. Moreover, in response to the differential pay gaps across jobs requiring different levels of "soft"/"hard" skills, blacks are more likely to self-select themselves into the jobs that use "hard" skills more intensively, ceteris paribus. Using NLSY data, we find consistent empirical evidence to our theoretical predictions. Hence, the paper bridges the existing literature on racial pay gaps and cognitive vs. non-cognitive skills by explicitly testing the impact of job skill types on racial pay gaps.

Keywords: pay differentials; discrimination; hard skills; soft skills (search for similar items in EconPapers)
JEL-codes: J24 J31 J71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-soc
Date: 2005-10
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