Enodogenous Racial Identity: Evidence from Brazilian RAIS and PNAD Data

Abstract

In Brazil, different employers report different racial classifications for the same worker. We use the variation across employers to identify the relationship between race and wages. As much as 40 percent of the raw racial wage gap remains after controlling for all individual characteristics that do not change across jobs. Workers whose reported race changes from non-white to white receive a wage increase; those who change from white to non-white realize a symmetric wage decrease. We formally test, and reject, the hypothesis that our results are driven by misclassification.