The Decreasing Influence of Domestic Market Structure on Racial Earnings Differentials: 1984 to 1996

Abstract

This study investigates the market concentration/racial earnings discrimination relationship in two periods: 1984-90 and 1991-96. In each period, the racial wage gap and the residual wage gap are compared for union and nonunion workers in monopolistic and competitive industries. The authors find no evidence of market structure-driven discrimination for union workers in either period. However, from the first to the second period they find evidence of increased racial earnings differentials for nonunion workers, yet market structure-driven discrimination decreases. The authors suggest that concentration has become a less effective measure of market power and firms' latitude to discriminate.

JEL Classification: J31, J71