Illusory Wage Differentials: Comment

Document Type

Article

Publication Date

12-1984

ISSN

1944-7981

Publisher

American Economic Association

Language

en-US

Abstract

A recent article in this Review (1979) by Edward Lazear contends that black-white wage differentials have not narrowed as much as recent data may indicate. He suggests that the finding of a narrowing differential results in part from a mismeasurement of the real wage. Using a new measure, which supposedly takes account of differences in on-the-job training (OTJ), Lazear finds that whites enjoy a higher relative wage advantage than observed (1.47 as opposed to 1.37). This comment focuses on the new wage measure. When estimated with data from different time periods in the National Longitudinal Survey (NLS) sample, it is found to be unstable.

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