The Witness Box

Commenting on expert evidence, economic damages, and interesting developments in injury, wrongful death, business torts, discrimination, and wage and hour lawsuits

Thursday, February 12, 2009

25% of racial wage gap is due to prejudice: University of Chicago Professors find

Kerwin Kofi Charles and Jonathan Guryan, "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," published in the Journal of Political Economy, Vol. 116, No. 5, October, 2008, pp. 773-809.

Abstract: We test the predictions from Becker's (1957) seminal work on employer prejudice and find that relative black wages (vary negatively with the prejudice of the marginal "white" in a state, (b) vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state, and (c) very negatively with the fraction of a state that is black. Our estimates suggest that one-quarter of the racial wage gap is due to prejudice, with nontrivial consequences for black lifetime earnings.

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