Educational Variations in Cohort Trends in the Black-White Earnings Gap Among Men: Evidence From Administrative Earnings Data

Abstract

Despite efforts to improve the labor market situation of African Americans, the racial earnings gap has endured in the United States. Most prior studies on racial inequality have considered its cross-sectional or period patterns. This study adopts a demographic perspective to examine the evolution of earnings trajectories among white and black men across cohorts in the United States. Using more than 40 years of longitudinal earnings records from the U.S. Social Security Administration matched to the Survey of Income and Program Participation, our analyses reveal that the cohort trends in the racial earnings gap follow quite different patterns by education. Race continues to be a salient dimension of economic inequality over the life course and across cohorts, particularly at the top and the bottom of the educational distribution. Although the narrowing of the racial gap among high school graduates is in itself a positive development, it unfortunately derives primarily from the deteriorating economic position for whites without a college degree rather than an improvement in economic standing of their black counterparts.

Intracohort Trends in Ethnic Earnings Gaps: The Role of Education

“…In this scenario, therefore, ethnic inequality in earnings increases over the life course both between and within educational levels, thus contributing to overall increase in ethnic earnings inequality over the life course. This scenario explains part of the rise in earnings inequality between white and African American men in the United States (Cheng et al 2017).…”

“…Among men with low education, by contrast, race and ethnicity have a smaller impact on career earnings growth, mainly in their early career years (Tomaskovic-Devey et al 2005). Cheng et al (2017) recently showed that race continues to be a salient dimension of economic inequality over the life course, particularly at the top and the bottom of the educational distribution, whereas among workers with only a high school degree, the racial gap is declining. Contrary to that, Sakamoto, Tamborini, and Kim (2018) found that the negative net effect for African American men on long-term earnings is more severe at lower levels of education and is explained by unstable employment history among this racial group.…”

“…The above informative literature, however, has predominantly focused on measuring economic standings at a single point in time and thus focuses on differences in group averages to assess earnings inequality and changes over time in economic inequality. It is possible, however, that ethnic groups, for example, differ not only in their average earnings but also in their earnings trajectories over the life course (Cheng et al 2017;Yaish 2018, 2019;Sakamoto et al 2018;Song and Cheng 2016). Studying group differences in terms of population averages, we argue, may mask important intracohort trends over time.…”

“…This latter scenario explains part of the raise in earnings inequality between white and African American men in the United States (Cheng et al 2017), where discrimination is an important explanatory mechanism (Sakamoto et al 2018). However, there is very little reason to expect a similar effect in Israel, because discrimination practices are much less likely explanations for the gap in earnings between Ashkenazi Mizrachi Jews.…”

Determinants of Disparities in Covid-19 Job Losses

“…A large literature illustrates how existing patterns of social stratification shape socio-economic outcomes and the effects of large events and crises. Dudel and Myrskylä (2017); Cheng et al (2019) and Killewald and Zhuo (2019) illustrate disparities in occupational wage gaps and other labor market outcomes on the basis of age, gender, and ethnicity both in the US and abroad. Dudel and Myrskylä (2017) show that the Great Recession shortened the life expectancy for senior workers specially among white men.…”