From Dark to Light

Skin Color and Wages Among African-Americans

Goldsmith, Arthur H., Darrick Hamilton, and William Darity, Jr., Journal of Human Resources, 42(4), pp. 701-738.

The Preference for WhitenessHypothesis

• Social categorization is a fundamental cognitive process leading to in-groups and out-groups.

• Out-groups are exposed to prejudice and in-group members receive preferential treatment.

• In the U.S., whiteness is a defining attribute of the in-group.

• Possessing characteristics of the white in-group in the form of skin shade may lead to preferential treatment of light-skinned relative to darker-skinned African-Americans.

>>> Earnings will be related to the lightness of skin color, not just race.

Primary Questions

• Do light-skinned African-Americans earn more relative to whites than dark-skinned African-Americans?

• Among African-Americans, are there wage differences by skin shade?

Data

Multi-City Study of Urban Inequality (MCSUI)

• Authors’ sample: 948 Black and White Working Men Aged 19-65, 1992-1994

•Interviewer/individual race match.•Interviewers trained to establish

consistency in identifying skin shade.National Survey of Black Americans (NSBA)• 331 Black Working Men Aged 19-65, 1978-

1979

Mean of the Hourly Wage (MCSU)

• White $15.94• Light Black 14.42• Medium Black 13.23• Dark Black 11.72

Dummy Variable Method

Traditional ModelW = b1 + b2 RACE + …

RACE = 1 if individual is African-American = 0 if white.

b2 < 0 is evidence of discrimination vs. blacks.b2 > 0 is evidence of discrimination vs. whites.b2 = 0 is evidence of no discrimination.

“Rainbow” Model

W = b1 + b2 Light Black + b3 Medium Black + b4 Dark Black + …where skin shade variables are dummy variables.• b2 < 0, b3 < 0, and b4 < 0 is evidence of discrimination vs. light-skinned, medium dark-skinned, or dark-skinned blacks, respectively.

• |b2| < |b3| and |b2| < |b4| is evidence that light-skinned blacks face less discrimination than medium dark and dark skinned blacks.

Control Variables

• Human Capital: education, job tenure, disability• Workplace Characteristics: union status, firm size, supervise others, work part-time• Demographic Characteristics: age, married, number of dependents, foreign resident at 16 years of age• Family Characteristics when Young: raised by both parents, mother high school grad, father high school grad

Results Dummy Variable Method

1Controlling for human capital, workplace, and demographic variables.

Results Oaxaca Wage Decomposition

Technique 1

1Controlling for human capital, workplace, and demographic variables.

Conclusion

• Skin shade matters. Estimates indicate that light-skinned African-Americans earn more relative to whites than dark-skinned African-Americans.

• The black-white dichotomy used in labor economics yields misleading results. • The theory of the preference for whiteness is consistent with the results.