Concludes that about half of racial differentials in earnings are due to current labor market discrimination, with the remainder due to past discrimination. (BH)

The relationship between employer learning and statistical discrimination was explored through a statistical analysis that included a test for statistical discrimination or "rational" stereotyping in environments where agents learn over time. The test is used to study the working hypothesis that, because firms have only limited…

Through the 1960s, African-Americans earned much less than whites--even when their cognitive abilities (as measured by test scores) were similar. By the end of the century, however, many believed that employment discrimination had attenuated to such a degree that the gap in labor-market outcomes could be explained almost entirely by differences in…