| Abstract: | This article uses the decomposition analysis developed by Neumark and the 1987 CPS data to investigate the relative importance
of human capital and labor market structure in explaining the observed wage differential between white males and blacks (both
male and female). We find that labor market structure, as opposed to differences in human capital, explains a relatively large
portion of the wage gap between white males and blacks. In addition to blacks and whites being paid different wages for the
same work, they are also given unequal opportunities. This means that narrowing the human capital gap between the races will
not be enough to close the wage gap, as argued by human capital theorists. It is equally important to pursue policies that
provide access to higher paying jobs and industries for blacks. |
