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Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination Export

Journal of Political Economy, Vol. 116, No. 5. (1 October 2008), pp. 773-809.

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discrimination income race racism wages

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doi: 10.1086/593073 We test the predictions from Becker's (1957) seminal work on employer prejudice and find that relative black wages (a) vary negatively with the prejudice of the marginal white in a state, (b) vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state, and (c) vary negatively with the fraction of a state that is black. Our estimates suggest that one-quarter of the racial wage gap is due to prejudice, with nontrivial consequences for black lifetime earnings.


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