Education and Labor Market Discrimination
American Economic Review · 2011 · Volume 101 · Issue 4
Abstract
Using a model of statistical discrimination and educational sorting, we explain why blacks get more education than whites of similar cognitive ability, and we explore how the Armed Forces Qualification Test (AFQT), wages, and education are related. The model suggests that one should control for both AFQT and education when comparing the earnings of blacks and whites, in which case a substantial black-white wage differential emerges. We reject the hypothesis that differences in school quality between blacks and whites explain the wage and education differentials. Our findings support the view that some of the black-white wage differential reflects the operation of the labor market. (JEL I21, J15, J24, J31, J71)
Keywords
Analysis of Education, Economics of Minorities and Races, Non-labor Discrimination, Human Capital, Skills, Occupational Choice, Labor Productivity, Wage Level and Structure, Wage Differentials, Labor Discrimination
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