Labor Market Discrimination and Racial Differences in Premarket Factors

46 Pages Posted: 6 Jan 2005

See all articles by Pedro Manuel Carneiro

Pedro Manuel Carneiro

University College London - Department of Economics; IZA Institute of Labor Economics

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Dimitriy V. Masterov

University of Chicago - Harris Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: January 2005

Abstract

We investigate the relative significance of differences in cognitive skills and discrimination in explaining racial/ethnic wage gaps. We show that cognitive test scores taken prior to entering the labor market are influenced by schooling. Adjusting the scores for racial/ethnic differences in education at the time the test is taken reduces their role in accounting for the wage gaps. We also consider evidence on parental and child expectations about education and on stereotype-threat effects. We find both factors to be implausible alternative explanations for the gaps we observe. We argue that policies need to address the sources of early skill gaps and to seek to influence the more malleable behavioral abilities in addition to their cognitive counterparts. Such policies are far more likely to be effective in promoting racial and ethnic equality for most groups than are additional civil rights and affirmative action policies targeted at the workplace.

Keywords: ability, test scores, gaps, education

JEL Classification: J31

Suggested Citation

Carneiro, Pedro Manuel and Heckman, James J. and Masterov, Dimitriy V., Labor Market Discrimination and Racial Differences in Premarket Factors (January 2005). IZA Discussion Paper No. 1453. Available at SSRN: https://ssrn.com/abstract=644341

Pedro Manuel Carneiro

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

James J. Heckman (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-0634 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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American Bar Foundation

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Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Dimitriy V. Masterov

University of Chicago - Harris Public Policy ( email )

1155 East 60th Street
Center for Social Program Evaluation
Chicago, IL 60637
United States

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