ABSTRACT
This chapter discusses the statistical methods economists employ to measure labor market discrimination against, say, African Americans. Earnings differences among workers employed full-time during the entire year are driven mainly by differences in wage rates. Occupational segregation appears to be less prevalent by race than by gender. One of the implications of customer discrimination is that it will lead to segregation in the occupations with high customer contact. Labor market discrimination is said to exist if individual workers who have identical productive characteristics are treated differently because of the demographic groups to which they belong. Ethnicity was very important, as people divided along ethnic lines into separate neighborhoods, churches, trade unions, and social clubs. The Equal Pay Act took a step toward the elimination of wage differentials, but in so doing, it tended to suppress a market mechanism that helped women obtain greater access to jobs.
