Thursday, April 11, 2013

Black White Wage Gap Was Declining For 2 Decades Before Passage Of '64 Civil Rights Law And Continued On Same Trend After Passage: Education And Migration Reduced Racial Wage Gap - Not Anti-Discrimination Legislation

Posted by Milton Recht:

From John Goodman's Health Policy Blog, "Regulation" by John Goodman:
Take the 1964 Civil Rights Act. The O’Neill’s [June and David O’Neill, economics professors at Baruch College, NY] find that the black/white wage gap was narrowing at about the same rate in the two decades leading up to the passage of the act as it did in the years that followed. [The Declining Importance of Race and Gender in the Labor Market: The Role of Employment Discrimination Policies.] Only in the South is there evidence that the legislation mattered. Outside the South, federal legislation basically followed social change rather than lead it. The wages of blacks rose relative to those of whites over time for two primary reasons: (1) more schooling and better schooling and (2) the migration of blacks out of the South.

As for the wages of men and women, the O’Neill’s find no evidence that antidiscrimination policies have made a difference, including the actions of the Equal Employment Opportunities Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP).

But isn’t there a lot of discrimination going on right now? Isn’t regulation combatting it?

Take the difference in pay for black and white men. The O’Neill’s find that the difference narrows to just 4% after adjusting for years of schooling and it reduces to zero when you factor in test scores on the Armed Forces Qualification Test (AFQT), which is basically an intelligence test. In other words, after adjusting for just two factors that cause people to be different, the pay gap between black and white men disappears entirely. Among women, the gap actually reverses after adjusting for education and AFQT scores. Black women get paid more than white women. [Weblink added.]

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