Volume 29, Number 1 (Winter) 1994
Gill, Andrew M. 1994. "Incorporating the Causes of Occupational Differences in Studies of Racial Wage Differentials." Journal of Human Resources 29(1):20-41.
This study provides a basic framework for incorporating the causes of occupational differences into analyses of racial wage differentials. Separating the influences of personal characteristics, occupational choice, and hiring discrimination on occupational attainment provides measures of the contributions of each to the racial pay gap. The paper also considers the potential for bias in the wage-equation estimates arising from self selection into occupations. There are two general findings. First, correcting for self-selection increases the importance of occupational distribution in explaining racial wage differentials. Second, a proper accounting of the causes of these occupational differences yields discrimination measures that are higher than those that arise when occupational dummy variable are included in the wage equations and all the difference in occupational distribution is treated as nondiscriminatory.
The author is an associate professor of economics at California State University, Fullerton. The helpful comments of Robert Ayanian, Vic Brajer, Stewart Long, Eric Solberg, Carol Tremblay, Donald Williams, participants in the CSUF Economics Workshop, and three anonymous referees are gratefully acknowledged. The data used in this article can be obtained beginning in August 1994 through August 1997 from the author at the following address: Department of Economics, California State University, Fullerton, Fullerton, CA 92634.
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