Race, cognitive skills, psychological capital and wages

Review of Black Political Economy

Volumn 26, Issue 2, 1998, Pages 9-21

  Goldsmith, Arthur H ^a   Darity, William ^b   Veum, Jonathan R ^c  

^a WASHINGTON AND LEE UNIVERSITY   (United States)

^b UNIVERSITY OF NORTH CAROLINA   (United States)

^c BUREAU OF LABOR STATISTICS   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0039968652     PISSN: 00346446     EISSN: None     Source Type: Journal    
DOI: 10.1007/s12114-998-1001-0     Document Type: Article

References (43)

1. Thernstrom, A., and S. Thernstrom, "The Real Story on Black Progress," The Wall Street Journal, September 3, 1997.
2. O'Neill, June, "The Role of Human Capital in Earning Differences Between Black and White Men," The Journal of Economic Perspectives, Winter 1990, 25-45;
3. Neal, Derek A. and William R. Johnson, "The Role of Premarket Factors in Black-White Wage Differences," The Journal of Political Economy, October 1996, 869-95.
4. Thernstrom and Thernstrom, 1997.
5. Goldsmith, Arthur H., Jonathan R. Veum, and William Darity, Jr., "The Impact of Psychological and Human Capital on Wages," Economic Inquiry, October 1997, 815-29.
6. Goldsmith, Veum, and Darity, 1997.
7. Dunifon, Rachel, and Greg J. Duncan, "Long-Run Effects of Motivation on Labor-Market Success," Social Psychology Quarterly, 1998, 61:1, 33-48.
8. O'Neill, 1990.
9. Neal and Johnson, 1996.
10. Mincer, Jacob, "On-the-Job-Training: Costs, Returns, and Some Implications," Journal of Political Economy, October 1962, S50-S79;
11. Mincer, Jacob, Schooling, Experience, and Earnings. New York: Columbia University Press for the National Bureau of Economic Research, 1974.
12. Gottschalk, Peter, "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, Spring 1997, 11:2, 21-40.
13. Herrnstein, Richard, and Charles Murray, The Bell Curve: Intelligence and Class Structure in American Life. New York: Basic Books, 1994.
14. O'Neill, 1990; Neal and Johnson, 1996.
15. Altonji and Spletzer (1991) use either high school class rank or a person's score on the Scholastic Aptitude Test to measure cognitive ability. Card and Krueger (1990) use secondary school quality to gauge ability. Hanushek, (1986) provides an excellent review of the literature on measurement of personal ability and its subsequent impact on wages.
16. Murname, Richard J., John B. Willett, and Frank Levy, "The Growing Importance of Cognitive Skills in Wage Determination," The Review of Economics and Statistics, May 1995, 77:2. 251-66.
17. Mason, Patrick L., "Race, Culture, and Skill: Interracial Wage Differences among African Americans, Latinos, and Whites," The Review of Black Political Economy, forthcoming.
18. O'Neill, 1990.
19. Ferguson, Ronald F., "Shifting Challenges: Fifty Years of Economic Change toward Black-White Earnings Equality," Deadalus, Winter 1995, 124, 37-76; Neal and Johnson, 1996.
20. Herrnstein and Murray, 1994.
21. O'Neill, 1990, p. 32.
22. Given O'Neill's perspective on what the AFQT reflects, discrimination in the provision of school resources and perceived disparate social and economic treatment could influence AFQT scores.
23. Goldberger and Manski (1995), in their review of the Bell Curve, argue convincingly that AFQT scores are influenced by factors including educational attainment and social resources - AFQT is not fixed at birth - and therefore AFQT is a poor measure of cognitive ability. Their view, which is now shared by most economists including O'Neill and Neal and Johnson, is that AFQT reveals mastery level of basic academic skills. In a wage regression that controls for both a person's educational attainment and the resources they received during childhood and adolescence an individual's AFQT score performs better as a measure of cognitive ability, but remains less than ideal.
24. Card, David, and Alan Krueger, "School Quality and Black-White Relative Earnings: A Direct Assessment," Quarterly Journal of Economics, February 1992, 107:1, 151-200.
25. Darity, William, Jr., "Programmed Retardation and the Theory of Noncompeting Groups," unpublished manuscript, University of North Carolina at Chapel Hill, May 1997.
26. Rodgers, William M., and William E. Spriggs, "What Does AFQT Really Measure: Race, Wages, Schooling, and the AFQT Score," The Review of Black Political Economy, Winter 1996. 24:4, 13-46.
27. Thernstrom and Thernstrom, 1997.
28. Erikson, Erik H., "Identity and the Life Cycle," Psychological Issues, January 1959, 50-100.
29. Rosenberg, Morris, Society and the Adolescent Self-Image. Princeton, NJ: Princeton University Press, 1965.
30. Rosenberg, Morris, Society and the Adolescent Self-Image. 1965. Ibid.
31. Robinson and Wrightsman (1991) offer an excellent description and psychometric evaluation of all the commonly used measures of self-esteem. See also Wylie (1989) for an extensive discussion of Rosenberg's SES.
32. Brockner, Joe, Self-Esteem at Work. Lexington, MA: Lexington Books, 1988.
33. Erikson, 1959.
34. He found self-esteem was directly linked to productivity in two ways. First, managers perceived that high self-esteem workers tend to use their time more effectively. The latter needed less direction from supervisors, leading to shorter periods of "down time." Second, workers high in self-esteem exercised a more efficient use of group time by exhibiting a willingness to consider a wider range of solutions to problems; and they were more confident decision makers. These characteristics led to groups with high levels of cooperation and, groups less inclined to seek guidance from managers.
35. Goldsmith, Veum, and Darity, 1997.
36. O'Neill, 1990; Neal and Johnson, 1996.
37. Rosenberg, 1995.
38. Wage data are only available on working individuals. Unobserved personal characteristics may exists that influence both the decision to work and compensation if employed. We adopt a technique developed by Heckman (1979) to account for these differences.
39. A detailed discussion of our results for equation (6) and the empirical procedures used appears in Goldsmith, Veum, and Darity, 1997.
40. Some caution is called for when comparing the 1980 and 1987 results, since the latter year has a much larger sample size.
41. For complete results as well as a detailed description of how all the variables in equation (7) are measured and the procedure used to estimate equation (7) see Goldsmith, Veum, and Darity, 1997.
42. This finding is consistent with Mason's (1998) speculation that there may be unobservable variables in wage equations that favor black productivity. See Darity and Mason (1998, footnote 13) for a thorough discussion of this argument.
43. O'Niell, 1990; Neal and Johnson, 1996.