When controlling for many factors that determine earnings differentials (age, occupation, education, etc.), there is still an
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Question:
When controlling for many factors that determine earnings differentials (age, occupation, education, etc.), there is still an 'unexplained' difference of 11% in earnings between Black and white workers.
a. What is one reason why this may be an overstatement of the degree of labor market wage discrimination? Briefly explain.
b. What is one reason why this may be an understatement of the degree of labor market discrimination? Briefly explain.
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