Recent dynamics in racial wage gap in the United States

ABSTRACT

Using weekly earnings data from Current Population Survey for Black and White Americans employed full time, we examine how disparities based on race stand relative to disparities between wage groups. We find that wage disparity between wage groups prevails significantly as compared to race wage gap on explaining overall wage inequality among Blacks and Whites in the United States.

KEYWORDS:

• Decomposition
• wage inequality
• theil index

JEL CLASSIFICATION:

• D60
• D63
• J15.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For example, if $y=(1,3,5,7,3)$, and $y$ is partitioned into two sets $y^{(1)}=(1,3)$ and $y^{(2)}=(5,7,3)$. The decomposability property implies that $I(y)=\left(\frac{4}{19}\right)I(y^{(1)})+\left(\frac{15}{19}\right)I(y^{(2)})+I(2,2,5,5,5)$.