| Abstract: | Conclusion In general, most studies have been unable to confirm the predictions of the Becker utility approach to discrimination by employers
and employees. This lack of verification would seem to indicate that the observed wage differentials are generated by a different
or more complex process. However, such a strong statement is premature in view of the measurement problem that has been present
in most studies. Becker’s model is a characterization of how individual employers and employees behave in the market. Empirical
testing of Becker’s model requires detailed information about the degree and level of contact between the races, the wage
rates paid to each race, skills of each worker, and the manner of employment and placement of each race. Invariably the lack
of such detailed firm data, particularly wage rates, forces researchers to use aggregative data of income or earnings averages
and occupation of workers employed within a state or broadly defined industry in order to generalize how firms behave in the
market. The necessity of using such data, however, results in a dichotomy between the original parameters in Becker’s model
and the data utilized. Clearly the lack of a significant association between the data utilized and the parameters specified
in Becker’s model undermines the credibility of such empirical testing. The empirical analysis on the implications of Becker’s
theory of discrimination has left a wide variety of unsettled questions and much remains to be done. |
