Identity matters: inter- and intra-racial disparity and labor market outcomes

Patrick Leon Mason, Florida State University

Abstract

Standard econometric analysis of African American – white inequality incorporates racial classification as an exogenous binary variable. This approach masks identity differences among African Americans: empirically obfuscating the relative importance of racial self-identity and clouding our ability to understand the relative importance of unobserved productivity-linked attributes versus market discrimination as determinants of racial inequality in labor market outcomes. Our examination of identity heterogeneity among African Americans suggests racial wage disparity is most consistent with weak colorism, while genotype disparity best describes racial employment differences. Further, among African Americans, the wage data are not consistent with the hypothesis that black-mixed race wage disparity can be explained by differences in unobserved productivity-linked productive attributes. Instead, the evidence suggests that employers discriminate less against mixed-race persons than against black individuals.