DC Accepted Papers Paper:
Understanding the Racial Gaps in the Early Career Experiences of Millennial Men
*Names in bold indicate Presenter
This paper studies the racial gaps in the early careers of Millennial men. Using a semi-parametric decomposition method, I evaluate the contributions of i) individual skill, ii) family background, iii) childhood neighborhood, and iv) school-to-work transition to the labor market gaps observed between black and white men in the NLSY-97. I establish three main findings. First, racial differences in measured individual skill explain up to half of the mean racial gaps in employment and earnings. This central role of skill is attributable primarily to racial differences in measured cognitive skills rather than to differences in formal schooling. Second, on its own, measured childhood neighborhood explains a meaningful share of the racial employment and earnings gaps. Conditional on family background and individual skill, however, its explanatory power is negligible. Third, observed racial differences in the four factors together account for approximately 80%-90% of the mean racial gaps in employment and earnings. Overall, my findings suggest that policies aimed at narrowing racial labor market gaps among young men need to pay more attention to racial skill gaps and black disadvantage in the skill accumulation process.
