Sex Differences in the Economic Advantages of Physician Board Certification

Abstract

The study of wage differentials has received considerable attention in the economic literature. Economists who have studied minority-majority wage differentials have observed that for minority workers, the earnings advantage associated with the investment to obtain above average credentials is greater than the earnings advantage for majority workers who have obtained identical credentials. However, for minority workers of average credentials or below average credentials, the effect of investment in human capital on their earnings is lower than it is for majority workers [6; 22]. Some researchers have argued that these differences in earnings related to human capital arise as a result of uncertainty about productivity levels combined with differential signaling costs. Golbe [8], for example, provides a theoretical model that indicates that differences in signaling costs between minority and majority workers can lead to the observed pattern of differences in the earnings of minority-majority workers, even in the absence of discrimination. This differential in earnings results if low-productivity minority workers have a lower probability of providing a high market signal than low-productivity majority workers, or if high-productivity minority workers have a higher probability of providing a high market signal than high-productivity majority workers. Under these circumstances, employers offer lower wages to low-signal minority workers and higher wages to high-signal minority workers, relative to majority workers [8, 846-47]. Even in the absence of differential signaling costs, this wage differential will result if employers face an constraint. The affirmative action constraint would