Journal of Economic Perspectives
Volume 12, Number 2
Evidence on Discrimination in
Employment: Codes of Color, Codes of
William A. Darity Jr. and Patrick L. Mason
here is substantial racial and gender disparity in the American economy.
As we will demonstrate, discriminatory treatment within the labor market
is a major cause of this inequality. The evidence is ubiquitous: careful
research studies which estimate wage and employment regressions, help-wanted
advertisements, audit and correspondence studies, and discrimination suits which
are often reported by the news media. Yet, there appear to have been periods of
substantial reductions in economic disparity and discrimination. For example, Do-
nohue and Heckman (1991) provide evidence that racial discrimination declined
during the interval 1965-1975. Gottschalk (1997) has produced statistical estimates
that indicate that discrimination against black males dropped most sharply between
1965 and 1975, and that discrimination against women declined during the interval
1973-1994. But some unanswered questions remain. Why did the movement toward
racial equality stagnate after the mid-1970s? What factors are most responsible for
the remaining gender inequality? What is the role of the competitive process in
elimination or reproduction of discrimination in employment?
The Civil Rights Act of 1964 is the signal event associated with abrupt changes
in the black-white earnings differential (Bound and Freeman, 1989; Card and Krue-
ger, 1992; Donohue and Heckman, 1991; Freeman, 1973).' Along with other im-
' Evidence on racial progress in economic status is contingent on the measure selected for consideration.
While black-white earnings ratios rose for more than a decade following the passage of the Civil Rights
Act, black-white family income ratios have remained in a stable, narrow band between 60 and 64 percent
between 1960 and the present. The ratio actually declined below 60 percent during the 1982 reces-
sion (Darity and Myers, forthcoming). Moreover, there has been little change in black-white
William A. Darity is the Cary C. Boshamer Professor of Economia, University of North
Carolina, Chapel Hill, North Carolina. Patrick L. Mason is Associate Professor of Economics,
University of Notre Dame, South Bend, Indiana.