DOCUMENT RESUME ED 309 204 UD 026 853 AUTHOR O'Neill, June; And Others TITLE The Economic Progress of Black Men in America. Clearinghouse Publication 91. INSTITUTION Commission on Civil Rights, Washington, D.C. PUB DATE Oct 86 NOTE 166p. AVAILABLE FROMUnited States Commission on Civil Rights, Washington, DC 20425. PUB TYPE Reports - Research/Technical (143) EDRS PRICE MF01/PC07 Plus Postage. DErCRIPTORS *Black Employment; Blacks; Civil Rights Legislation; *Economically Disadvantaged; *Education Work Relationship; Equal Opportunities (Jobs); Labor Market; *Males; Multivariate Analysis; *Racial Differences; Racial Discrimination; Research Proposals; *Salary Wage Differentials; Unemployment IDENTIFIERS '.*Economic Equity ABSTRACT This report attempts to identify and analyze the causes of the differences between the earnings and employment of black males and white males. Although the earnings gap between black and white men was substantially reduced between 1940 and 1980, black men still earn less than white men. While the relative earnings of black men has risen since 1940, their relative employment has declined. Factors that influence the earnings gap include the following: (1) discrimination; (2) education; (3) region of residence; (4) industrial sector; and (5) marital status. The report finds that while a narrowing of racial differences in worker characteristics accounts for part of the earnings convergence, other factors, including declining racial prejudice, federal civil rights policies, and unmeasured changes in employment skills, must be considered. The precise effect of civil rights policy remains undetermined. Some of the evidence attributes earnings differentials to differences in knowledge and skills acquired in school. Further research on the following issues is recommended: (1) the effect of civil rights programs; (2) black-white differentials in educational attainment; (3) declining labor force participation among younger black men; (4) upward earnings bias due to labor force withdrawal; and (5) the failure of the black-white unemployment gap to narrow. The report includes four appendices, a bibliography, 51 statistical tables, and nine figures. (AF) Reproductions supplied by EDRS are the best that can be made * from the original document. WO U.S DEPARTMENT OF EDUCATION Office of Educational Research and Improvement EDUCATIONAL PESOURCES INFORMATION CENTER (ERIC) The Economic +Ttus documenthas been reproduced as received from tne person or organaat.on ongmating it C Mmor changes nave been made to improve reproduce on quality Progress of Points of oew or opmons stated in thiSdOCu ment do not necessaray represent &two' UERI position or Polcy Black Men in America United States Commission on Civil Rights Clearinghouse Publication 91 October 1986 U.S. COMMISSION ON CIVIL RIGHTS The U.S. Commission on Civil Rights is an independent, bipartisan agency first established by Congress in 1957 and reestablished in 1983. It is directed to: Investigate complaints alleging that citizens are being deprived of their right to vote by reason of their race, color, religion, sex, age, handicap, or national origin, or by reason of fraudulent practices; Study and coilect information concerning legal developments constituting discrimination or a denial of equal protection of the laws under the Constitution because of race, color, religion, sex, age, handicap, or national origin, or in the administration of justice; Appraise Federal laws and policies with respect to discriminatir or denial of equal protection of the laws because of race, color, religion, sex, age, handicap, or national origin, or in the administration of justice; Serve as a national clearinghouse for information in respect to discrimination cr denial of equal protection of the laws because of race, color, religion, sex, age, handicap, or national origin; Submit reports, findings, and recommendations to the President and the Congress. MEMBERS OF THE COMMISSION Clarence M. Pendleton, Jr., Chairman Murray Friedman, Vice Chairman Mary Frances Berry Esther Gonzalez-Arroyo Buckley John H. Bunzel Robert A. Destro Francis S. Guess Blandina Cardenas Ramirez J. Al Latham, Jr.. Staff Director The Economic Progress of Black Men in Ameilca United States Commission on Civil Rights Clearinghouse Publication 91 October 1986 Acknowledgments This report was prepared by June O'Neill, James Cunningham, Andy Sparks, and Hal Sider, a former employee who worked on the initial stages of the study. Nabeel Alsalam, Matthew Cooper, Harriet Duleep, Robert E. Johnson, and Philip Lyons also contributed to the report. Jonathan Dunn, Elizabeth Farkas, and Christopher Jones provided able research assistance. Editorial and production assistance were provided by Sally Harriston, Carol-Lee Hurley, Darcy Johnson, Martha Jones, Felice Roggen, Joseph Swanson, and Linda Zimbla. Appreciation is also extended to Cathy H. Somers and Audrey H. Wright who typed the many drafts of this report and helped to prepare the final manuscript. The report was prepared under the overall supervision of June O'Neill, Assistant Staff Director for Programs and Policy. This report is part of a larger project on the incomes of Americans. The members of the advisory committee to the project are: Prof. Glen Cain, Department of Economics, University of Wisconsin; Prof. Claudia Goldin, Department of Economics, University of Pennsylvania; Prof. Glenn Loury, John F. Kennedy School of Government, Harvard University; Prof. Jacob Mincer, Department of Economics, Columbia University; Prof. Stephan Thernstrom, Department of History, Harvard University; Prof. Finis Welch, Department of Economics, University of California at Los Angeles. Other outside experts who have provided helpful comments include, alphabetical- ly: Prof. Alfred Blumrosen, Rutgers Law School, Rutgers; Prof. Charles Brown, Department of Economics, University of Michigan; Prof. Barry Chiswick, Department of Economics, University of Illinois at Chicago; Prof. Reynolds Farley, Department of Sociology, University of Michigan; Dr. Harry Gilman, U.S. Department of Labor; Prof. Nathan Glazer, Graduate School of Education, Harvard University; Prof. Eric Hanushek, Department of Economics, University of Rochester; Prof. Robert Higgs Department of Economics and Business, Lafayette College; Prof. Robert Margo, Department of Economics, Colgate University; Prof. William J. Wilson, Department of Sociology. University of Chicago. iii 5 Contents Executive Summary 1 Introduction 7 Part I: An Overview of Racial Patterns in Earnings and Employment,1940-1980 9 1.Trends in Earnings and the Economy 10 Earnings Growth Changes in the, Relative Earnings Differential Patterns of Growth Is Black Earnings Growth a Statistical Illusion? Distinguishing Fluctuations and Trends Annual Changes in Relative Earnings Earnings Inequality Differences and Trends in Earnings Inequality Relative Earnings Gains for High and Low Earners Concluding Comments 7s. Trends in Employment and Unemployment 26 Measures of Current Labor Force Status Labor Force Participation Unemployment Weeks and Hours of Work Summary Part II: Sources of the Earnings Gap,1940-1980 50 3.The Economics of Discrimination: Theory and Measurement 51 Measurement of Discrimination 4.Education and Training 54 Differences in Years of Schooling Differences in School Quality arid Educational Achievement Measures of Educational Outcomes Summary of Racial Differences in Educational Attainment The Effect of Racial Differences in Schooling on Raciai Differences in Earnings iv 1 Work Experience and On-The-Job Training 5.Geographic Migration and Other Sources of the Wage Gap 78 Geographic Location and Migration Industrial Sector Marital Status 6.A Multivariate Analysis 89 Accounting for the Earnings Gap Racial Differences in Coefficients Changes in the Earnings Ratio Over Time Summary Part III: Why the Wage Gap Narrowed: ,.1ternative Hypotheses 99 7.Labor Market Effects of Civil Rig Etc Policy 100 Background Issues in Enforcement Econometric Studies Conclusions 8.Unexplained Wage Differentials 110 Factors Underlying the Trend The Current Wage Gap and Unmeasured Characteristics Concluding Comments 116 What Has Happened Since 1980? Issues for Future Research Statement of Chairman Clarence M. Pendleton, Jr. 118 Statement of Commissioner John H. Bunzel Joined by Vice Chairman Murray Friedman and Commissioners Esther G. Buckley and Robert Destro 120 Dissenting Statement of Commissioners Mary Frances Berry, Francis S. Guess, and Blandina Cardenas Ramirez 122 Appendices A.Data Development 124 B.The Impact of Sample Definition on Relative Earnings 129 C.Regression Analysis: Methodology and Estimates 139 D.Black-White Earnings Ratios 150 Bibliography 152 Tables 1.1Real Earnings Growth: Average Annual Percentage Rates of Change for Men by Race and Age 11 1.2Black-White Annual Wage and Salary Ratios for Men by Age 11 1.3Black-White Weekly Wage and Saiary Ratios for Men by Age 13 1.4Black-White Hourly Wage and Salary Ratios for Men by Age 13 1.5Black-White Annual Total Earnings Ratios for Men by Age 14 1.6Change in Black-White Earnings Ratios by Decade for Men Ages 25-64 14 1.7Dispersion of Wage and Salary Earnings by Race 20 L8 Dispersion of Weekly Earnings by Race, Education, and Region 21 1.9Change in Black-White Earnings Ratios for Men 24 2.1 Male Civilian Labor Force Participation Rates by Race andAge 28 2.2 Black Male Civilian Labor Force Participation Rates by Ageand Education 29 2.3 White Male Civilian Labor Force Participation Rates byAige and Education 30