The Importance of Understanding Racial Disparities in Education and Income

Racial disparities in education and income have been studied extensively since Gary Becker's groundbreaking research on discrimination in the 1950s. Discrimination can be categorized as taste-based, information-based, or structural-based. Taste-based discrimination occurs when individuals have personal preferences against certain groups. Information-based discrimination arises due to imperfect information about an individual's qualifications. Structural-based discrimination is the result of policies or procedures that unintentionally have a disproportionate impact on certain groups. Research suggests that discrimination does exist, but measuring its extent is challenging. Economists have developed various techniques to estimate the presence and magnitude of discrimination in labor markets and other areas. The evidence suggests that discrimination accounts for a smaller proportion of disparities than commonly believed, with other factors contributing more significantly. However, it is important to distinguish between disparities caused by different people having different qualifications and disparities resulting from biased treatment of equally qualified individuals.