February 22, 2003

Notes: Relative Wage Gaps by Race

*Sigh* Yet another depressing thing to cross my desk this morning...


Is the Convergence of the Racial Wage Gap Illusory? by Amitabh Chandra | NBER Working Paper No. w9476 | I demonstrate that the literature on the racial wage gap has systematically overstated the gains made by African American men by ignoring their withdrawal from the labor force. Three sources of selection-bias are identified: imposing sample selection criteria based on labor supply, trimming wages on the basis of real-dollar cutoffs, and making inferences based on Current Population Survey (CPS) data whose truncated sampling design excludes the growing incarcerated population. To recover the counterfactual distribution of skill-prices for non-workers, I implement a quasi-bounds estimator that does not require the use of arbitrary exclusion restrictions for identification and find that: (1) Corrected estimates of the racial wage gap indicate a substantial role for the efficacy of the Civil Rights Act and related initiatives in affecting convergence in segregated states; ignoring selection causes estimates of convergence in the South as well as the within-cohort component of this change to be understated. (2) In contrast to the sharp convergence observed in standard wage series from 1970-90, selectivity corrected estimates indicate complete [relative wage] stagnation...

Posted by DeLong at February 22, 2003 12:16 PM | TrackBack
Comments

I've seen the point about excluding "the growing incarcerated population" made by your friend Noam Chomsky, although he was comparing U.S. income to other countries

Posted by: David on February 22, 2003 10:03 PM

Can anyone find a previous version of this paper on a website somewhere for those of us who don't subscribe to the NBER's working paper series?

Posted by: dsquared on February 23, 2003 09:42 AM

dsquared, the best bet is just to email the author. Most are flattered to be asked - & sometimes it leads to a really good email discussion.

Posted by: derrida derider on February 23, 2003 02:21 PM

“Corrected estimates of the racial wage gap indicate a substantial role for the efficacy of the Civil Rights Act and related initiatives in affecting convergence in segregated states”

Why are some people immediately interpreting this data as evidence of racism? Couldn’t there be other aspects in play? For example, the destruction caused to minority schools by Liberals such as Jonathan Kozol and others? The Liberals must take the blame for stifling discussion over the weaknesses of black families in the United States. Gosh, have we already conveniently forgotten what happened to Daniel Patrick Moynihan and Edward Banfield? The Democrat Party is unwittingly the enemy of all black Americans.

Posted by: David Thomson on February 23, 2003 04:03 PM

Uh, what did happen to Moynihan, David? Had a great career, was the conscience of the democratic party during the Reagan administration, and held a Senate seat for seemingly his entire life?

Posted by: Jason McCullough on February 23, 2003 10:56 PM

"Uh, what did happen to Moynihan, David?"

Well, this might be of interest for starters:

"Another objection, of course, is that here we have a white social scientist and political actor passing judgment on the quality of moral life in some ways among blacks. So he (Daniel Patrick Moynihan) was accused of racism. "

"Basically, Moynihan was accused by people of blaming the victims. In fact, the phrase "blaming the victim" was invented by one writer in reaction to the Moynihan report, the politics of controversy that ensued after the report. Blaming the victim because, by pointing to cultural factors, specifically childbearing, marriage and family formation, he was saying somehow, the critics thought, it's their fault that they're in this bad condition."

http://www.pbs.org/fmc/interviews/loury.htm

Posted by: David Thomson on February 24, 2003 12:37 AM

How much responsibility (not blame) for the problem should be accepted by the administration at Berkeley?

It is, of course, insignificant in any statistical sense, because the numbers of graduates involved is, per the department's website, generally less than 200 per year.

But I can't help but wonder how the earnings numbers of black adult males are affected by the study choices of black teenaged males -- who may be seduced into such programs as UC Berkeley's
African American Studies Department. What are the employment prospects for graduates of such a program, with such a degree? And what kind of wage do they make?

I compare the web-pages of the more general
UCB "Ethnic Studies" program, which at least considers the question of "doing something" with their degrees:

http://socrates.berkeley.edu/~ethnicst/whatmajor.html

"What are some of the most popular career options for graduates with this major?

The career options for majors in Ethnic Studies, Asian American Studies, Chicano Studies, and Native American Studies are various. One career
option is teaching, either in colleges and universities or secondary schools. Another is in clinical psychology and counseling. A legal
career can make good use of the major's special knowledge of the social, political, and legal status of one or more of the country's ethnic
minorities. That knowledge is also useful in many different careers: for example, journalism, free-lance writing, radio and television writing and
production, motion picture writing and production, health care services, social work, community organization, and a wide variety of civil service positions in the federal, state, and local governments. "

With the complete LACK of interest in employment, career, and wage prospects on the corresponding page for the African American Studies Department:

http://ist-socrates.berkeley.edu/~africam/

" ... " (It's hard to quote the lack of
a statement)


Some (admittedly not many) of the brightest, most employable, and potentially highest-wage-earning young black males in California that MIGHT have gotten degrees in Business Administration, Education, Engineering, Physics,
Economics, or even general Social Science, History, or Literature -- instead get degrees in being black.

This does not, to me, suggest a strong foundation for lifting the average wage of the entire social group.

I'm curious, Professor. How many of your students are black? What percentage of your classes -- compared to the percentage of the student body at UCB or the State of California in general -- are black males? How many of those black students you teach are pursuing a degree in your discipline and how many are enriching their African-American Studies core-experience by taking your subject as an elective?

Interesting math project -- what, if any, is the correlation of percentage of black attendence in a lecture hall at UCB with the future wage-earning prospects of the attendees? If we could sample some third year courses in pre-law, or pre-med, or engineering or computer science or your better-experienced pick -- versus courses in education (teachers are notoriously low-paid,
but the prospects of steady work are pretty good)
or business administration or economics -- versus African American Studies courses. I would certainly expect that the percent of black faces in the latter course approaches 100%. That would tend, I think, to anchor one end of the trend line ...

In general we see strong correlations between college degrees and income. The degree is, if nothing else, a filtering mechanism for employers -- a person who can work hard enough to get that piece of paper is generally a better worker than one who can not or has not. But, were I running a small business strugling to stay profitable, a job candidate whose documented academic focus was more on the blackness of the workforce than the blackness of the ink on a bottom line would filter himself right out of an invitation to interview. Maybe this is prejudice. Maybe, though, it's economic rationality.

I rant at more length than the notion deserves. But as long as you're at your UCB desk and want to feel depressed, ANYWAY -- might as well heap a dollop of white liberal guilt atop the load, right?

Posted by: Melcher on February 24, 2003 06:46 AM

hey, how about accounting for the "informal" incomes that large numbers of those incarcerated people had prior to incarceration... or do you think that "crime doesn't pay"???

as for withdrawing from the workforce... well i can think of one program that encourages people to leave the worforce... and it ain't exactly a conservative one.. but it obviously can't have any ill effects at all, can it?

Posted by: libertarian uber alles on February 24, 2003 08:57 AM

"What are the employment prospects for graduates of such a program, with such a degree? And what kind of wage do they make?"

Oh good lord. I'm sure their employment prospects and salary expectations are comparable to history majors. As we all know, history programs have contributed to the destruction of the white middle class.

Posted by: Jason McCullough on February 24, 2003 10:39 AM

Jason, thanks for saying it for me. It is as if by bringing up The Bell Curve Murtaugh overturned a log in the forest and the pale, slimy slugs crawled out.

There aren't enough black and Hispanic men in prison to explain the wage differentials between those groups and whites. There has to be some other reason. Hint: It has something to do with a long and continuing history of racism in our country.

Nor does taking African-American studies classes or majoring in the field have any impact on being hired. Most people in any middle-class field are either undegreed or have a degree in an area that does not particularly match what they end up doing. Besides, most students in black studies classes are white, as are some of the degree holders.

One of the most intriguing recent findings on job discrimination is that African-Americans are discriminated against on the basis of their names, with potential employers much more likely to reject their applications without further consideration. I wonder how that is black folks' fault.

Posted by: Mac Diva on February 24, 2003 08:39 PM

"One of the most intriguing recent findings on job discrimination is that African-Americans are discriminated against on the basis of their names"

That’s totally false. You are extrapolating a conclusion not warranted by the data. If anything, the study indicates that anyone with an unconventional name has a more difficult time getting a job. This may not be fair, but it’s not necessarily racist.

Posted by: David Thomson on February 25, 2003 01:02 PM

David, you Gene Expression fellows are rather boring. Reading "its not necessarily racist" posted by bigots over and over again elicits yawns.

The study about names was widely reported. People can read it and decide what it says for themselves. Hint: If Gene Expression people don't like the study, then it probably reveals racism does exist.

Posted by: Mac Diva on February 25, 2003 07:58 PM
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