LABOR MARKET INFORMATION: Results 2

Tables 2 and 3 report the results for the test of statistical versus taste discrimination, for men and women respectively. The first column in Panel A of each table reports OLS estimates of a standard log wage regression (for starting wages) without any information on performance ratings, with controls for education, age, job requirements, and race/ethnicity. In both the male and female samples, wages of blacks are significantly lower by about 14 percent, while wages of Hispanics are not significantly lower (with the point estimates indicating wage gaps of one to four percent). These results are not fully consistent with other estimates of race and ethnic wage differentials, where it is more common to find a smaller race difference among women than among men (Blau and Beller, 1992), and Hispanic-white differences are often larger than black-white differences (Reimers, 1983). However, this sample is somewhat unique in covering four specific metropolitan areas, and the wage measure studied here is the starting wage. The starting wage differentials associated with schooling appear relatively similar to those observed in other data sets for contemporaneous wages, although the considerably higher wage premium for male college graduates compared with female college graduates is unusual. The relationship between age and the starting wages also parallels the usual relationship. Among the job requirements, both specific experience and training are associated with significantly higher wages, while general experience is not.


Column (2) of Tables 2 and 3 reports OLS estimates of regressions of log wages on performance ratings (in Panel A) and log performance ratings (in Panel B). For men, the estimated coefficients of the performance ratings variables are positive and statistically significant. Using the standard deviations from Table 1, a one standard deviation increase in performance ratings (a weighted average across the demographic groups of 13.90 for the linear variable, and .22 for the log variable) is associated with a six percent increase in the wage, which is about one-sixth of the standard deviation of log wages. Thus, the estimated coefficients on the productivity variables appear quite small. For women, the estimated coefficients in column (2) are even smaller, and not statistically significant.