Long-Term Earnings Differentials Between African American and White Men by Educational Level
This paper investigates long-term earnings differentials between African American and white men using data that match respondents in the Survey of Income and Program Participation to 30 years of their longitudinal earnings as recorded by the Social Security Administration. Given changing labor market conditions over three decades, we focus on how racial differentials vary by educational level because the latter has important and persistent effects on labor market outcomes over the course of an entire work career. The results show that the long-term earnings of African American men are more disadvantaged at lower levels of educational attainment. Controlling for demographic characteristics, work disability, and various indicators of educational achievement does not explain the lower long-term earnings of less-educated black men in comparison to less-educated white men. The interaction arises because black men without a high school degree have a larger number of years of zero earnings during their work careers. Other results show that this racial interaction by educational level is not apparent in cross-sectional data which do not provide information on the accumulation of zero earnings over the course of 30 years. We interpret these findings as indicating that compared to either less-educated white men or highly educated black men, the long-term earnings of less-educated African American men are likely to be more negatively affected by the consequences of residential and economic segregation, unemployment, being out of the labor force, activities in the informal economy, incarceration, and poorer health.
KeywordsLong-term earnings Racial inequality Education Administrative data Work disability
We thank the Editor and three anonymous reviewers for their helpful and constructive comments. This research was partially supported by the Eunice Kennedy Shriver National Institute of Child Health and Human Development of the National Institute of Health (Grant No.: 1R03HD073464-01A1) and Spencer Foundation (Grant No.: 201400077). ChangHwan Kim also received support from the University of Kansas (General Research Fund #2301065). The views expressed in this study are those of the authors and do not represent the views of the U.S. Social Security Administration or any organization or entity of the federal government. The administrative data are accessible only at a secured site and for approved projects. SSA’s Disclosure Review Board has reviewed the statistics reported herein. For researchers with access to these data, our computer programs are available upon request.
- Carnevale, A. P., Rose, S.J., & Cheah, B. (2013). The college payoff: Education, occupations, lifetime earnings. Georgetown University Center on Education and the Workforce.Google Scholar
- Davis, J., & Mazumder, B. (2011). An analysis of sample selection and the reliability of using short-term earnings averages in SIPP-SSA matched data. US Census Bureau Center for Economic Studies Paper No. CES-WP-11-39.Google Scholar
- Duggan, J. E., Greenlees, J. S., & Gillingham, R. (2007). Mortality and lifetime income: Evidence from US social security records. No. 7-15. International Monetary Fund Working Paper #7-15.Google Scholar
- Duncan, G. J., & Magnuson, K. (2011). The nature and impact of early achievement skills, attention skills, and behavior problems. In G. J. Duncan & R. J. Murnane (Eds.), Whither opportunity? Rising inequality, schools, and children’s life chances (pp. 47–70). New York: Russell Sage Foundation.Google Scholar
- Fairlie, R. W., & Sundstrom, W. A. (1997). The racial unemployment gap in long-run perspective. The American Economic Review, 87, 306–310.Google Scholar
- Farley, R. (1996). The new American reality. New York: Russell Sage Foundation.Google Scholar
- Hirsch, B. T., & Winters, J. V. (2014). An anatomy of racial and ethnic trends in male earnings in the US. Review of Income and Wealth, 60, 930–947.Google Scholar
- Massey, D. S., & Denton, N. A. (1993). American apartheid: Segregation and the making of the underclass. Cambridge: Harvard University Press.Google Scholar
- Mouw, T. (2016). The impact of immigration on the labor market outcomes of native workers: Evidence using longitudinal data from the LEHD. US Census Bureau Center for Economic Studies Paper No. CES-WP-16-56.Google Scholar
- Owens, A., Reardon, S. F., & Jencks, C. (2016). Income segregation between schools and school districts. In press at American Education Research Journal. Google Scholar
- Pettit, B. (2012). Invisible men: Mass incarceration and the myth of black progress. New York: Russell Sage Foundation.Google Scholar
- Ruggles, S., Genadek, K., Goeken, R., Grover, J., & Sobek, M. (2015). Integrated public use microdata series: Version 6.0 [dataset]. Minneapolis: University of Minnesota. http://doi.org/10.18128/D010.V6.0.
- Takei, I., & Sakamoto, A. (2008). Do college-educated, native-born Asian Americans face a glass ceiling in obtaining managerial authority. Asian American Policy Review, 17, 73–85.Google Scholar
- Wilson, W. J. (1987). The truly disadvantaged. Chicago: University of Chicago Press.Google Scholar
- Wilson, W. J. (1996). When work disappears. New York: Vintage.Google Scholar
- Wilson, V., & Rodgers III, W. M. (2016). Black-white wage gaps expand with rising wage inequality. Economic Policy Institute. Retrieved from http://www.epi.org/files/pdf/101972.pdf.