This paper summarizes recent research in economics
that investigates differentials by race and gender in the labor
market. We start with a statistical overview of the trends in labor
market outcomes by race, gender and Hispanic origin, including some
simple regressions on the determinants of wages and employment.
This is followed in Section 3 by an extended review of current theories
about discrimination in the labor market, including recent extensions
of taste-based theories, theories of occupational exclusion, and
theories of statistical discrimination. Section 4 discusses empirical
research that provides direct evidence of discrimination in the
labor market, beyond "unexplained gaps" in wage or employment regressions.
The remainder of the paper reviews the evidence on race and gender
gaps, particularly wage gaps. Section 5 reviews research on the
impact of pre-market human capital differences in education and
family background that differ by race and gender. Section 6 reviews
the impact of differences in both the levels and the returns to
experience and seniority, with discussion of the role of training
and labor market search and turnover on race and gender differentials.
Section 7 reviews the role of job characteristics (particularly
occupational characteristics) on the gender wage gap. Section 8
reviews the smaller literature on differences in fringe benefits
by gender. Section 9 is an extensive discussion of the empirical
work that accounts for changes in the trends in race and wage differentials
over time. Of particular interest is the new research literature
that investigates the impact of widening wage inequality on race
and gender wage gaps. Section 10 reviews research that relates policy
changes to race and gender differentials, including anti-discrimination
policy. The paper concludes with comments about a future research
agenda.
Joseph G. Altonji, Department
of Economics, Northwestern University
Rebecca M. Blank, School of Public Policy, University
of Michigan
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