COGNITIVE SKILL AND ECONOMIC-INEQUALITY - FINDINGS FROM THE NATIONAL ADULT LITERACY SURVEY

Few would deny that the civil rights and women's movements have substa ntially changed U.S. society. Yet ethnic and gender inequality in empl oyment and earnings remain large. Even when comparisons are confined t o persons of similar educational attainment, African Americans and His panic Americans earn less than European Americans, women earn less tha n men, and African Americans suffer a substantially elevated risk of u nemployment. One prominent explanation for ethnic differences in earni ngs and employment is that, holding constant access to schooling, diff erences in economic outcomes reflect differences in cognitive skills t hat have become decisive in the modern labor market. A prominent expla nation for the gender gap emphasizes gender differences in occupationa l preference, with women choosing occupations that are lower paying. B ased on an intensive analysis of data from the U.S. National Adult Lit eracy Survey, the authors find that these two explanations are only pa rtly successful in illuminating ethnic and gender inequality in employ ment and earnings. Alternative explanations emphasizing labor market d iscrimination and residential segregation cannot be ignored. In this a rticle, Stephen Raudenbush and Rafa Kasim consider the implications of this new evidence for current debates about affirmative action and ed ucational reform.