Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014
Studying working and non-working men, we find that, after closing substantially from 1940 to the mid-1970s, the median black-white earnings gap has since returned to its 1950 level, while the positional rank the median black man would hold in the white distribution has remained little changed since 1940. By contrast, higher quantile black men have experienced substantial gains in both relative earnings levels and their positional rank in the white earnings distribution. Using a new decomposition method that extends existing approaches to account for non-participation, we show that the gains of black men at higher quantiles have been driven primarily by positional gains within education level due to forces like improved access to quality schools and declining occupational exclusion. At the median and below, strong racial convergence in educational attainment has been counteracted by the rising returns to education in the labor market, which have disproportionately disadvantaged the shrinking but still substantial share of blacks with lower education.
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Document Object Identifier (DOI): 10.3386/w22797