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Race, Skin Color, and Economic Outcomes in Early Twentieth-Century America

63 Pages Posted: 7 Mar 2016  

Roy Mill

Stanford University

Luke C.D. Stein

Arizona State University (ASU) - Finance Department

Date Written: Feb 16, 2016

Abstract

We study the effect of race on economic outcomes using unique data from the first half of the twentieth century, a period in which skin color was explicitly coded in U.S. censuses as “White,” “Black,” or “Mulatto.” We construct a panel of siblings by digitizing and matching records across the 1910 and 1940 censuses, identifying all 12,000 African-American families in which enumerators classified some children as light-skinned (“Mulatto”) and others as dark-skinned (“Black”). Siblings coded “Mulatto” when they were children (in 1910) earned similar wages as adults (in 1940) as their Black siblings. This within-family earnings difference is substantially lower than the Black-Mulatto earnings difference in the general population, suggesting that skin color in itself played only a small role in the earnings gap. In the second half of the paper, we focus on individuals who “passed for White,” an important social phenomenon at the time. To do so, we identify individuals coded “Mulatto” as children but “White” as adults. Passing meant that individuals changed their racial affiliation by changing their social presentation while skin color remained unchanged. Comparing passers to their siblings who did not pass, we find that passing was associated with substantially higher earnings, suggesting that social presentations of race could have significant consequences for economic outcomes.

JEL Classification: N3, J15, J7, D1, Z13

Suggested Citation

Mill, Roy and Stein, Luke C.D., Race, Skin Color, and Economic Outcomes in Early Twentieth-Century America (Feb 16, 2016). Available at SSRN: https://ssrn.com/abstract=2741797 or http://dx.doi.org/10.2139/ssrn.2741797

Roy Mill

Stanford University ( email )

Stanford, CA 94305
United States

Luke C.D. Stein (Contact Author)

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States
480-965-9412 (Phone)
480-965-8539 (Fax)

HOME PAGE: http://www.lukestein.com

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