Culture matters: America’s African Diaspora and labor market outcomes

This paper contrasts the explanatory power of the mono-cultural and diversity models of racial disparity. The mono-cultural model ignores nativity and ethnic differences among African Americans. The diversity model assumes that culture affects both intra- and interracial labor market disparity. The diversity model seeks to enhance our ability to understand the relative merits of culture versus market discrimination as determinants of racial inequality in labor market outcomes. Our results are consistent with the diversity model of racial inequality. Specifically, racial disparity consists of the following outcomes: 1) persistent racial wage and employment effects between both native and immigrant African Americans and whites, 2) limited ethnicity effects among African Americans, 3) diverse employment and wage effects among native and immigrant African Americans, 4) intra-racial wage penalties (premiums) for immigrant (native) African Americans, and 5) evidence of relatively higher unobserved productivity-linked attributes among Caribbean-English immigrants. There are regional and intertemporal variations in these inequalities