Racial Differences in Availability of Fringe Benefits as an Explanation for the Unexplained Black-White Wage Gap for Males in US

The US black-white wage gap is an issue that has attracted thorough investigation, but so far the corresponding gap for fringe benefits has not received sufficient attention. Although ethnic differences in fringe benefits could affect wage differences, previous analysis of ethnic wage gaps in the vast majority of cases has not taken fringe benefits into account. In order to fill that gap in the existing literature, this article estimates the black-white gap for both wages and fringe benefits on the basis of US data. Data from the 2004 section of the National Longitudinal Survey of Youth 1979 has been used in this analysis. Our results indicate that when controlling for various individual and job characteristics, there remains a wage gap in favour of whites, and for several fringe benefits, there is an unexplained gap in favour of blacks. This result means that the ethnic wage gap overestimates the ethnic compensation gap. We also argue that fringe benefits are used to compensate blacks for their lower wages