Explaining the Black-White Wage Gap

As of 2010, black men in America earned 74.5 percent of a typical white man's wage; black women earned 69.6 percent. A new paper from Harvard's Roland Fryer (certified genius), Princeton's Devah Pager and Jorg L. Spenkuch of the University of Chicago examines some of the factors driving the black-white wage gap.

Using data from unemployed workers in New Jersey who sought employment for up to 12 weeks, the authors show that racial discrimination accounts for one-third of the wage difference. They also estimate that blacks have a 7 percent lower reservation wage than their white counterparts at a comparable job that demands a comparable skill level. Fryer and his colleagues control for skill level by measuring the job applicants' wage at their previous job against the wage they were seeking.

Here’s the abstract: