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Journal of Labor Research

, Volume 36, Issue 3, pp 249–273 | Cite as

Estimating Hispanic-White Wage Gaps Among Women: The Importance of Controlling for Cost of Living

  • Peter McHenry
  • Melissa McInerneyEmail author
Article
  • 357 Downloads

Abstract

Despite concern regarding labor market discrimination against Hispanics, previously published estimates show that Hispanic women earn higher hourly wages than white women with similar observable characteristics. This estimated wage premium is likely biased upwards because of the omission of an important control variable: cost of living. We show that Hispanic women live in locations (e.g., cities) with higher costs of living than whites. After we account for cost of living, the estimated Hispanic-white wage differential for non-immigrant women falls by approximately two-thirds. As a result, we find no statistically significant difference in wages between Hispanic and white women in the NLSY97.

Keywords

Hispanic-white wage disparities Local cost of living 

JEL Classification

J31 J70 R23 

Notes

Acknowledgments

The authors gratefully acknowledge support from a W.E. Upjohn Institute Early Career Research Grant. This research was conducted with restricted access to Bureau of Labor Statistics (BLS) data. The views expressed here do not necessarily reflect the views of the BLS. We thank Alison Courtney and Sarah Gault for excellent research assistance.

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of Economics and the Thomas Jefferson Program in Public Policy at the College of William and MaryWilliamsburgUSA
  2. 2.Department of EconomicsTufts UniversityMedfordUSA

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