Identity matters: inter- and intra-racial disparity and labor market outcomes

Standard analysis of racial inequality incorporates racial classification as an exogenous binary variable. This approach obfuscates the importance of racial self-identity and clouds our ability to understand the relative importance of unobserved productivity-linked attributes versus market discrimination as determinants of racial inequality in labor market outcomes. Our examination of identity heterogeneity among African Americans suggests racial wage disparity is most consistent with weak colorism, while genotype disparity best describes racial employment differences. Further, among African Americans, the wage data are not consistent with the hypothesis that black-mixed race wage disparity can be explained by differences in unobserved productivity-linked productive attributes.