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The Importance of Cost of Living and Education in Estimates of the Conditional Wage Gap Between Black and White Women

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  • Peter McHenry
  • Melissa McInerney

Abstract

While evidence about discrimination in U.S. labor markets typically implies preferential treatment for whites, recent studies document a substantial wage premium for black women (for example, Fryer 2011). Although differential selection of black and white women into the labor market has been a suggested explanation, we demonstrate that accounting for selection does not eliminate the estimated premium. We then incorporate two additional omitted variables recently documented in the literature: (1) local cost of living and (2) years of education attained, conditional on AFQT score. After controlling for these variables, we find no evidence of a wage premium for black women.

Suggested Citation

  • Peter McHenry & Melissa McInerney, 2014. "The Importance of Cost of Living and Education in Estimates of the Conditional Wage Gap Between Black and White Women," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 695-722.
    • Handle: RePEc:uwp:jhriss:v:49:y:2014:iii:1:p:695-722
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    Cited by:

    1. Tenev, Nicholas H, 2020. "Social Connections and Racial Wage Inequality," SocArXiv vm82w, Center for Open Science.
    2. Jonathan D. Fisher & Christina A. Houseworth, 2017. "The Widening Black-White Wage Gap among Women," LABOUR, CEIS, vol. 31(3), pages 288-308, September.
    3. Peter McHenry & Melissa McInerney, 2015. "Estimating Hispanic-White Wage Gaps Among Women: The Importance of Controlling for Cost of Living," Journal of Labor Research, Springer, vol. 36(3), pages 249-273, September.
    4. Ahmed, Salma, 2015. "Dynamics and diversity: How are religious minorities faring in the labour Market in Bangladesh?," MPRA Paper 75153, University Library of Munich, Germany, revised 18 Nov 2016.
    5. Joanna N. Lahey, 2017. "Understanding Why Black Women Are Not Working Longer," NBER Chapters, in: Women Working Longer: Increased Employment at Older Ages, pages 85-109, National Bureau of Economic Research, Inc.
    6. Peter McHenry & Jennifer Mellor, 2018. "Medicare hospital payment adjustments and nursing wages," International Journal of Health Economics and Management, Springer, vol. 18(2), pages 169-196, June.
    7. William J. Collins & Michael Q. Moody, 2017. "Racial Differences in American Women's Labor Market Outcomes: A Long-Run View," NBER Working Papers 23397, National Bureau of Economic Research, Inc.

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