Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Labor market discrimination and racial differences in premarket factors
(), James Heckman and Dimitriy Masterov
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: Cognitive skills; discrimination; wage gaps; (follow links to similar papers)
JEL-Codes: J31; (follow links to similar papers)
44 pages, September 15, 2004
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- This paper is published as:
Carneiro, Pedro, James Heckman and Dimitriy Masterov, (2005), 'Labor market discrimination and racial differences in premarket factors', Journal of Law and Economics, Vol. 48, No. 1, pages 1-39
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