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Ethnicity and Earnings in a Mixed-Race Labor Market

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  • Hugo Ñopo
  • Jaime Saavedra
  • Máximo Torero

Abstract

This study examines the relationship between earnings and racial differences in a context in which various races have coexisted and mixed during several centuries, as is true in many parts of the postcolonial world and specifically urban Peru. Coarse indicators of racial differences do not suffice in capturing this relationship; therefore, we introduce a score-based procedure of white and indigenous racial intensities that allows us to approximate these mixed racial heritages. We introduce a score-based procedure of white and indigenous racial intensities that allows us to approximate the heterogeneity within the mestizo population. We construct two types of indicators of racial intensities using a score-based procedure: a single-dimensional indicator of degrees of whiteness and a two-dimensional indicator combining degrees of both whiteness and indigenousness. This second indicator allows us to study nonlinearities in earning differences across mixed white and indigenous racial characteristics. Our estimates from a semiparametric model show evidence of a race premium for whiteness on earnings, statistically significant among wage earners but not among the self-employed. These results may be consistent with a story of employer discrimination.

Suggested Citation

  • Hugo Ñopo & Jaime Saavedra & Máximo Torero, 2007. "Ethnicity and Earnings in a Mixed-Race Labor Market," Economic Development and Cultural Change, University of Chicago Press, vol. 55(4), pages 709-734, July.
    • Handle: RePEc:ucp:ecdecc:v:55:y:2007:p:709-734
    DOI: 10.1086/516762
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    References listed on IDEAS

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    1. Edward Telles & Nelson Lim, 1998. "Does it matter who answers the race question? Racial classification and income inequality in Brazil," Demography, Springer;Population Association of America (PAA), vol. 35(4), pages 465-474, November.
    2. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
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    1. Valenzuela, Patricio & Ñopo, Hugo R., 2007. "Becoming an Entrepreneur," IDB Publications (Working Papers) 1951, Inter-American Development Bank.
    2. Hugo Ñopo, 2007. "Una Extensión de la Descomposición de Blinder-Oaxaca a un Continuo de grupos en Comparación (An Extension of the Blinder-Oaxaca Decomposition to a Continuum of Comparison Groups)," Research Department Publications 4533, Inter-American Development Bank, Research Department.
    3. Pasquier-Doumer, Laure & Risso Brandon, Fiorella, 2015. "Aspiration Failure: A Poverty Trap for Indigenous Children in Peru?," World Development, Elsevier, vol. 72(C), pages 208-223.
    4. Ñopo, Hugo, 2008. "An extension of the Blinder-Oaxaca decomposition to a continuum of comparison groups," Economics Letters, Elsevier, vol. 100(2), pages 292-296, August.
    5. Stanley R. Bailey & Aliya Saperstein & Andrew Penner, 2014. "Race, color, and income inequality across the Americas," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 31(24), pages 735-756.
    6. Moreno, Martín & Ñopo, Hugo & Saavedra, Jaime & Torero, Máximo, 2012. "Detecting Gender and Racial Discrimination in Hiring Through Monitoring Intermediation Services: The Case of Selected Occupations in Metropolitan Lima, Peru," World Development, Elsevier, vol. 40(2), pages 315-328.
    7. Hugo Ñopo & Patricio Valenzuela, 2007. "Convirtiéndose en empresario," Research Department Publications 4520, Inter-American Development Bank, Research Department.
    8. Craig Hammer & Juan Jintiach & Ricardo Tsakimp, 2013. "Practical developments in law science and policy: efforts to protect the traditional group knowledge and practices of the Shuar, an indigenous people of the Ecuadorian Amazon," Policy Sciences, Springer;Society of Policy Sciences, vol. 46(2), pages 125-141, June.

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