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Racial wage gaps and differences in human capital

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  • Kwabena Gyimah-Brempong
  • Rudy Fichtenbaum

Abstract

This paper uses the Cotton/Neumark decomposition methodology and 1990 CPS data to investigate the relative importance of labour market structure and human capital in explaining the white male/Asian, white male/black, white male/Hispanic wage gaps. We find that labour market structure is more important than human capital in explaining the white minority wage gaps. Moreover, most of the labour market structural effects are due to differential returns to white structural characteristics. Our result is robust to the specification of human capital. Our results contradict the results of research that indicate that the white/minority wage gaps can be explained solely by differences in the endowment of human capital. Our results have implications for narrowing the wage gaps between whites and racial minorities.

Suggested Citation

  • Kwabena Gyimah-Brempong & Rudy Fichtenbaum, 1997. "Racial wage gaps and differences in human capital," Applied Economics, Taylor & Francis Journals, vol. 29(8), pages 1033-1044.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:8:p:1033-1044
    DOI: 10.1080/000368497326426
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    9. Barry R. Chiswick, 1988. "Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(3), pages 571-597.
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    Cited by:

    1. O'Gorman, Melanie, 2010. "Educational disparity and the persistence of the black-white wage gap in the U.S," Economics of Education Review, Elsevier, vol. 29(4), pages 526-542, August.

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