Research

Does Race Affect Black Women’s Earnings in the United States?

Economist Marlene Kim asked this question in a 2002 Feminist Economics article of the same title. Kim used human capital regression models to capture if Black women receive less pay because they are women, Black, or both.

Human capital regression models attempt to identify differences in wage outcomes after controlling for other explanatory factors like levels of education. Generally, Black women have earned less than similarly skilled white women and this trend has continued in the long term. Some attribute this to discrimination which anti-discrimination laws attempt to reduce the effects of. Black women and White women also tend to perform different jobs:

There has been a convergence in both occupation and industry: whereas black women were once largely concentrated in household service work and manufacturing jobs, they are now more likely to be employed as clerical workers or service workers in service industries – jobs in which white women are also most likely to be employed (Cunningham and Zalokar 1992; see also Mary King 1992).
Other measures, like AFQT, draw the conclusion that Black women earn similar or more than white women. Therefore, metrics themselves factor into conclusions about race, gender and wage differentials.

Kim uses the 2000 Current Population Survey (CPS) data to examine earnings differences in the United States with the Blinder-Oaxaca procedure. This approach enables an understanding of whether differences in wages by race result from Black women having fewer returns to their human capital or varying amounts of human capital compared to white women. The “unexplained gap” gets attributed to discrimination or the effect of unexplained variables.

Marlene Kim’s study shows that Black women tend to have less earnings than white women. Results show that even when Black women have the same human capital, they receive lower wages. Differences in human capital mealy about 45% of the difference in earnings. In contrast, variations in the return to human capital accounted for 55% of the difference in earnings. Ultimately, Black women are paid 7% than white women with similar human capital, primarily because they get less of a return on their earnings.

The data and the specifications explain the results of Kim’s study. Still, the data suggest that Black women’s earnings remain lower than White women’s earnings. A great deal of wage still remains unexplained. Regardless, Black women continue to earn lower pay, primarily due to occupational segregation and lower returns to human capital, which some scholars state suggests evidence of discrimination.

This study occurred about thirteen years ago, but similar findings got released in the 2017 Status of Black Women in the United States Report. According to the report, “More than one-third of Black women (34.1 percent) are in the bottom earnings quartile, while just 12.4 percent are in the top quartile.” Further, they still receive only 64% of every dollar paid to white men.

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