The Black-White Gaps in Earning Profiles: Recent Cohort Trends in the United States

April 2011

Lingxin Hao, Johns Hopkins University

Download 'working_paper11-09.pdf'.


Abstract

This paper adds the person-year layer to the conventional cohort trend analysis and examines the black-white gap in the growth factors of individual earning profiles over the same young adult stage across 18 birth cohorts. Rather than annual earnings, we use cumulated earnings for its useful properties. An unprecedented data opportunity enables the pursuit of our purpose. Using multi-level latent growth modeling with random growth factors we provide three major findings. First, the trend analysis of the racial gap in growth factors provides much richer information on the timing and duration of racial discrimination responsible for the unfolding racial earning gap over the ages 26-35. Second, the effects of race on the growth factors for men exhibit no significant change, resulting in an overall picture of the persistent racial earning gap. In contrast, the effects of race show significant changes for women, resulting in an overall picture of closed racial earning gap. Third, the much greater percentage changes in race effects for women than for men suggest that efforts to reduce racial discrimination must be large enough to make an impact on the racial earning gap.



Keywords:
Discrimination, Employment, Unemployment, and the Labor Market, Race and Ethnicity