The Measurement of Race and Gender Wage Differentials: Evidence from the Federal Sector

Abstract

This paper presents an empirical analysis of wage differentials based on race and gender in the federal bureaucracy. By focusing on the study of interagency variations in wage differentials, the author shows, first, that the use in earnings functions of a simple dummy variable to indicate race and gender leads to downward-biased estimates of the standardized wage differential. Second, across federal agencies there is a positive correlation between wage differentials based on race and those based on gender. Finally, the low relative wage of black females is more a result of their gender than of their race. This variety of empirical findings shows the promise of future studies that concentrate on the interfirm variance in employment policies that affect women and minorities.