Wages, Sorting on Skill, and the Racial Composition of Jobs

Barry Hirsch () and David Macpherson

No 741, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: discrimination; racial composition; skill sorting (search for similar items in EconPapers)
JEL-codes: J3 J7 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2003-03
New Economics Papers: this item is included in nep-lab and nep-ltv
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Citations: View citations in EconPapers (3)

Published - published in: Journal of Labor Economics, 2004, 22 (1), 189-210

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Journal Article: Wages, Sorting on Skill, and the Racial Composition of Jobs (2004)
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