Racial Disparities in Job Finding and Offered Wages
Roland G. Fryer Jr.
Harvard University - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; University of Chicago
Harvard University - Harvard Kennedy School (HKS); IZA Institute of Labor Economics
Jörg L. Spenkuch
Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS)
September 1, 2011
The extent to which discrimination can explain racial wage gaps is one of the most divisive subjects in the social sciences. Using a newly available dataset, this paper develops a simple empirical test which, under plausible conditions, provides a lower bound on the extent of discrimination in the labor market. Taken at face value, our estimates imply that differential treatment accounts for at least one third of the black-white wage gap. We argue that the patterns in our data are consistent with a search-matching model in which employers statistically discriminate on the basis of race when hiring unemployed workers, but learn about their marginal product over time. However, we cannot rule out other forms of discrimination.
Number of Pages in PDF File: 72
Keywords: discrimination, wage gaps, race
JEL Classification: J71, J01, J15
Date posted: September 29, 2011