Abstract
This paper investigates the extent to which academic preparation, the structure of labor market opportunities, and exposure to nonmarket income alternatives explain race and gender differences in schooling and employment. Despite lower overall high school continuation and college attendance rates, Black men and women in the High School and Beyond Longitudinal Survey were actually more likely to continue high school and attend college than Whites with similar mathematics and verbal test scores. In contrast, Black school leavers had far lower employment rates than Whites with similar test scores. Multinomial logit estimates show that fewer job opportunities for Blacks offer a partial explanation for the observed patterns of schooling and employment. There is little or no evidence, however, that community crime and welfare recipiency rates affected the probability of employment for Blacks or Whites.
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