The determinants of earnings differentials for indigenous Americans: Human capital, location, or discrimination?

In 1989 American Indians or Alaska Natives had annual earnings between 19% and 39% less than non-Indians. This paper examines the determination of earnings differentials from a human capital perspective. Persons with Indian race are divided into single-ancestry and mixed-ancestry categories, as are Alaska Natives and those with non-Indian race. Indians of mixed ancestry had higher levels of, but lower returns from, human capital than Indians of single ancestry. Alaska Natives held a significant advantage over all groups. Decompositions show that most of the differentials could be attributed to differences in characteristics rather than wage structures.