Working Paper: NBER ID: w9133
Authors: Derek Neal
Abstract: Taken as a whole, the literature on black-white wage inequality suggests that racial gaps in potential wages are much larger among men than women, and further that one can accurately assess black-white gaps in potential wages among women without accounting for black-white differences in patterns of female labor supply. This paper challenges both pieces of this conventional wisdom. I provide several estimates of the black-white gap in potential wages for the year 1990 using data from the National Longitudinal Survey of Youth (NLSY), a panel data set that includes persons born between 1957 and 1964. I exploit data on wages and income sources for years before and after 1990 to develop imputation methods that allow me to adjust measures of the black-white wage gap among women for racial differences in selection patterns. Among young adult employed women in 1990, the Census, Current Population Surveys, and NLSY data yield median log wage gaps of -.11, -16, and -.18 respectively. Based on several different imputation procedures, I estimate that the median black-white gap in log potential wages among women in the NLSY is approximately -.25.
Keywords: No keywords provided
JEL Codes: N01; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Selection bias (C24) | Underestimation of actual wage gap (J79) |
| Family structures and income sources (J12) | Participation behavior (D16) |
| Participation behavior (D16) | Contamination of standard measures of wage gaps (J79) |
| Imputation methods (C36) | Median black-white wage gap in log potential wages (J79) |
| Observed gaps in reported wages (J31) | Underestimation of racial wage inequality (J79) |
| Racial wage inequality (J79) | Gender differences in black-white wage inequality (J79) |