For journalists, researchers and policymakers interested in understanding how job earnings differ across demographic groups, keep this mind: Measures of racial wage gaps that don’t account for prisoners and people who have been out of work a long time are probably missing the full economic picture, suggests new research by University of Massachusetts Amherst economist Jeannette Wicks-Lim.
The paper, “Revising the Racial Wage Gap Among Men in the United States: The Role of Nonemployment, Underemployment, and Incarceration,” is based on an analysis of nearly three decades of wage data and survey panels, spanning 1981 to 2008, of prime working-age men, 25 to 54.
Forty-three years ago, Duke University economist William Darity noted that selection bias — meaning a subset of a population a researcher is studying is excluded from analysis — was leading academics and journalists to overestimate the economic progress of Black workers.
In the early 1980s, news stories and research papers proclaimed an astonishing, shrinking earnings gap between Black and white workers during the 1960s and 1970s.
Darity was among the first to interrogate the underlying Census data used in most racial wage gap analyses at the time — the datasets left out people without earned income.
“The central argument is this: Blacks who are receiving incomes may well be moving closer to whites who are also receiving incomes,” Darity wrote in his 1980 paper, “Illusions of Black Economic Progress,” also published in The Review of Black Political Economy. “Nevertheless, if the proportion of Blacks who receive no income is consistently larger than the proportion among whites, racial inequality measured by the ratio of per capita incomes may not reveal the same evidence of approaching parity.”