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Race Earnings Differentials

Economists have been interested in the source of differences in earnings between racial and ethnic groups since at least the 1930s. Their main focus has been on whether wage differences are the result of market failure (discriminatory behavior by employers, workers, and consumers) or differences among racial or ethnic groups in productive skills. Historical data suggest that wage discrimination by race and ethnicity in the United States has declined since the 1940s but still may exist for workers in jobs associated with lower levels of education. The recent analysis of skills differences has focused on assessing whether these are mainly cognitive or noncognitive and whether they are formed early in childhood or result later from differential access to schooling quality. Earnings differentials that persist over ...

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