Volume 22, Number 3 (Summer) 1987
Shulman, Steven. 1987. "Discrimination, Human Capital, and Black-White Unemployment: Evidence from Cities." Journal of Human Resources 22(3):361-376.
Neither human capital theory nor the declining discrimination hypothesis can account for the failure of the black-white employment gap to fall along with the wage gap. However, the weakness of the labor market since 1970 suggests that sustained employment discrimination in the context of restrictions on compensatory wage discrimination can explain these trends. This hypothesis is assessed with a cross-sectional model employing 1980 census summary data on SMSAs. The innovative feature of this model is the use of complaints of job discrimination received by the Equal Employment Opportunity Commission as proxies for actual discrimination. Results support the contention that the forms of discrimination have undergone a compositional shift and that employment discrimination reduces the probability of black employment.
The author is an assistant professor of economics at Colorado State University, Fort Collins. He would like to thank Samuel Bowles, Daniel Clawson, Harvey Cutler, Richard Edwards, Herbert Gintis, seminar participants at the University of Tulsa, and two anonymous referees. Glen Coleman and Harold Sye of the Equal Employment Opportunity Commission very kindly produced the data. Responsibility for errors or omissions is solely that of the author.
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