Regression Analysis

Economists use two’ techniques to determine the extent of discrimination. Regression analysis is the traditional approach and uses statistical procedures to separate wage differences into differences in human capital (such as education and experience) and other factors (such as race and gender). What are the major findings? .

• For women, the extent of discrimination has shrunk markedly in recent years. Aside from the family gap-recent studies indicate that women with children have an earnings penalty of 10 to 15 ‘percent-women appear to have approximately the same earnings as equally qualified men.

• Data from 1980 and 1990 indicate that black men suffer from a 12 to 15 percent loss in earnings due to labor market discrimination. Black women, by contrast, appear to. have.earnings roughly comparable to’ those of quality qualified white women.

• One. set of studies examines the visible characteristics that lead to, discrimination. Particularly revealing are studies that look at differential treatment of groups on the basis of skin color. Because skin color-is often u~ed to discriminate among different racial and ethnic groups, researchers have examined the impact of skin color . on earnings, other things such as race. and ethnicity held constant. A striking set of findings is that most of the differences in the wages between black or Hispanic workers and white workers’ can be explained by the shade of skin color alone. These results point to the mechanism by which . social class and economic opportunity are determined, even among members of the same minority group.

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