Explaining the Trend

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Explaining the Trend

• Immigration and Other Stories

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Explanations for Black/White Difference in Labor
Market Status

• Differences in productivity
• Educational attainment matters
• Inclusion of AFQT score in wage equation reduces
  unexplained portion of wage gap
• Language ability matters in some jobs
• Cultural capital difficult to test
• Spatial mismatch
• Location matters
• Access to transportation matters
• Differential access to job networks

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Explanations Continued

• Pure Discrimination In conditions where
  productivity is known and black and white worker
  have equal productivity, employer prefers white
  worker because of personal tastes.
• Statistical DiscriminationProductivity is not
  known with 100 certainty. Economic agent uses
  race as a marker for unobserved productivity.
• Small of wage difference unexplained Audit
  studies Names studies Case studies.
• Race used by Capitalist to divide and conquer

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Explaining the Trend

• Changes in characteristics that affect
  productivity- education,cultural capital etc.
• Rise in premium associated with skill
• Technology
• Globalization
• Immigration
• Increase in spatial mismatch
• Increase or decrease in racial discrimination
• Change in utility of race as tool to divide
  conquer
• Change in strength of job networks
• Change in importance of job networks

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Impact of Immigration

• How does immigration affect the macro labor
  market?
• Pastor and Marcelli For several reasons (),
  there exists no unambiguous theoretical
  expectation regarding how an increased supply of
  foreign-born labor will impact native-born labor
  market outcomes in the aggregate.
• How does influx of foreign-born workers with low
  skill levels affect the market for low skill
  labor?
• Reduction of wages
• Potential displacement of native-born

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Impact of Immigration, Continued

• Why might blacks be more adversely affected than
  whites?
• More concentrated in low-skill jobs
• Influx of immigrants reduces costs of
  discrimination
• Employers prefer immigrants to blacks
  (ethnographic research)
• Why are some groups more successful than
  blacks?
• Employer preference
• Immigrants have tighter information networks
• Language premium in some labor market niches
• Differences in reservation wages

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Other Questions

• Why arent blacks more active in efforts to
  restrict immigration?
• They do perceive immigration has having negative
  effects.
• Pastor Marcelli use a game theoretic approach -
  other policy strategies seem more attractive in
  terms of potential reward and likelihood of
  success and these strategies require coalitions
  with Latinos.
• What is impact of high-skill immigration?
• Slower absorption of blacks into high-tech?
• Crowding out in colleges and universities?