Explaining Regional Differences in Black Earnings Discrimination among Full-time Working Men

Using data from the 2000 Census 1% PUMS, this paper analyzes the causes of regional differences in Black earnings discrimination. The methodology is a two stage process used to generate and analyze a cross section of earnings discrimination across cities. In the first stage, a city measure of discrimination is constructed using the Oaxaca decomposition method. The second stage then utilizes these estimated measures of discrimination as a dependent variable in OLS models to test various discrimination theories. While the second stage offers some evidence that increases in the size of both the Black labor force and immigrant labor force are positively related to greater discrimination, increasing overall income inequality is found to robustly increase Black earnings discrimination.