Bjerk, David. 2007. “The Differing Nature of Black-White Wage Inequality Across Occupational Sectors.” Journal of Human Resources 42(2): 398–434.
The nature of racial wage inequality appears to differ across occupation sectors. Specifically, I find that all of the racial wage inequality in the white-collar job sector can be accounted for by controlling for the academic skill level of each worker, but almost half of the overall racial wage inequality remains in the blue-collar sector after controlling for each worker’s academic skill. Relatedly, after controlling for academic skill, I find that black workers are actually more likely to work in the white-collar sector than white workers. I show that these findings are consistent, and arguably directly implied by, both preference-based and statistical-based models of discrimination. However, omitted variable bias and measurement error also cannot be ruled out as possible explanations.
David Bjerk is an assistant professor of economics at McMaster University and RAND Corporation. He thanks James Andreoni, Meta Brown, Maria Cancian, Arnaud Chevalier, Tom Crossley, John Kennan, Lance Lochner, David Loughran, Derek Neal, Menesh Patel, Aloysius Siow, James R. Walker, the participants of the 2003 SOLE conference, the University of Toronto Applied Microeconomics Seminar, and RAND for helpful comments on earlier drafts. The data used in this paper can be obtained October 2007 through September 2010 from David Bjerk, RAND Corp. 1776 Main Street, P.O. Box 2138, Santa Monnica, CA 90407, bjerkd@mcmaster.ca.