Friday, November 16, 2007

Black-White Wage Gap

I can't say if this is a surprising result or not: The black-white wage gap in the US has grown in the last three decades, according to the Boston Globe, citing a study by Julia Isaacs of the Brookings Institution. I'm trying to think of how this might work in an age of affirmative action, etc. Is there an equilibrium outcome that includes affirmative action-type policies that also leads to this type of divergence, and what about the design of current policies is exacerbating the gap?

A similar study from 1998 showed that the education gap could almost fully be explained by test scores? If we designed policies similar to the ones my colleague, Ani Mitra, proposes in a recent paper (blind policies for hiring and promotion based only on the weak signal of test scores), would they be politically implementable? Please, folks, gimme some commentary...