Past research on the U.S. labor market has shown that unemployment rates of African Americans have not only been substantially higher than those of whites over the past four decades, but that these differences have been amplified during recessions. But the extent to which these differences reflect unobserved skill and productivity – or factors such as discrimination – remains a matter of debate. Isaac Mbiti, assistant professor of economics in SMU’s Dedman College of Humanities and Sciences, proposes the use of wages earned in the previous year as a measure of a worker’s skill and productivity. With co-author Yusuf Soner Baskaya, he has used the Current Population Survey March Supplement and the National Longitudinal Survey of Youth, in each year from 1976 to 2003, to compare the employment outcomes of black and white workers who earned the same wage in the previous year. Their results have provided important data on the sources of black-white differences in employment outcomes. Learn more about Mbiti’s research in development and labor economics at his website.
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