Discrimination and Income Differentials.

This article presents a study which seeks to break down the income differential between whites and non-whites in the U.S. into two categories: a differential resulting from differences in productivity factors not directly related to employment discrimination, and a residual unaccounted for by differences in productivity factors and which may result largely from employment discrimination. The paper provides estimates of the importance of various factors in explaining the money income differential between white and nonwhite urban males, 25 years of age and over, in 1960. Also presented in this paper are estimates using both mean and median earnings data for males in nonfarm occupations and consideration of regional differences in earnings differentials between white and nonwhite males. After adjustment for differences in education, scholastic achievement, age, region, and city size, the nonwhite median income is estimated between 81 and 87 percent of the white for urban males and 77 and 86 percent for males in nonfarm occupations .The results indicate that a large portion of the income differential between white and nonwhite urban males is the result of differences in quantity of education and scholastic achievement. Whites and nonwhites differ not only in quantity of education, but also in scholastic achievement level. Nonwhites are over represented in southern states. This reduces their income relative to whites because: incomes of both whites and nonwhites are lower in southern states than northern states and; the income differential is greater in southern states. Moreover, nonwhites are overrepresented relative to whites in the larger cities. Nonwhite urban males were overrepresented in the prime earning age categories in the U.S. in 1959. The South is generally believed to be more inclined toward employment discrimination than the North.