American Economic Review: Vol. 101 No. 4 (June 2011)


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Education and Labor Market Discrimination

Article Citation

Lang, Kevin, and Michael Manove. 2011. "Education and Labor Market Discrimination." American Economic Review, 101(4): 1467-96.

DOI: 10.1257/aer.101.4.1467


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)

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Lang, Kevin (Boston U)
Manove, Michael (Boston U and CEMFI, Madrid)

JEL Classifications

I21: Analysis of Education
J15: Economics of Minorities and Races; Non-labor Discrimination
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials
J71: Labor Discrimination

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