Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014

63 Pages Posted: 14 Nov 2016

See all articles by Patrick J. Bayer

Patrick J. Bayer

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Kerwin Kofi Charles

University of Chicago - Harris School of Public Policy

Date Written: November 2016

Abstract

This paper presents new evidence on the evolution of black-white earnings differences among all men at different points in the distribution. We study two dimensions of earnings gaps: the black-white difference in earnings; and the difference between a black man’s position in the black earnings and the position he would hold in the white distribution. After narrowing from 1940 to the mid-1970s, the median black-white earning gap has since grown as large as it was in 1950. Even as his relative earnings improved then worsened, the median black man’s relative position in the earnings distribution has remained essentially constant. Black men at higher percentiles have experienced significant gains in relative earnings since 1940. Unlike blacks at the median and below, whose relative earnings changes have been chiefly the result of narrowing and stretching of the overall earnings distribution, higher percentile blacks have also experienced significant positional gains over the past 70 years.

Suggested Citation

Bayer, Patrick J. and Charles, Kerwin Kofi, Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014 (November 2016). NBER Working Paper No. w22797, Available at SSRN: https://ssrn.com/abstract=2868886

Patrick J. Bayer (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
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National Bureau of Economic Research (NBER)

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Kerwin Kofi Charles

University of Chicago - Harris School of Public Policy ( email )

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Chicago, IL 60637
United States
(773) 834-8922 (Phone)

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