The Returns to On-the-Job Training: Are They the Same for Blacks and Whites?

Abstract

The trend in earnings differentials among demographic groups in general, and the status of black workers relative to white workers specifically, is a timely and ongoing topic of research. Nearly two decades of evidence suggests that while wage gains associated with increases in human capital acquisition by blacks were steady and sustained from post-World War II through the rapid progress of the 1960s, and even throughout most of the 1970s, the progress of those years slowed or ceased altogether in the 1980s.' Various explanations have been advanced in an attempt to explain the white/black wage gap and how it has changed over time. Some have focused on the important roles of education, literacy, and migration and have shown that the convergence in the earnings of blacks and whites can be largely attributed to the convergence in these human capital variables between the two groups.2 Other studies have suggested that the important factor in explaining changes in the white/ black wage gap has been anti-discrimination legislation such as Title VII of the Civil Rights Act of 1964 [17; 2; 5]. Recently, some have suggested that other factors, such as family background [10], educational achievement and quality [18; 20], and occupational shifts [3] are playing an increasingly important role in explaining white/black earnings differentials. In this paper, we contribute to the work previously done by focussing on the role that on-thejob training plays in explaining wage differentials among demographic groups and by investigating how shifts in the acquisition of training by different groups over time have impacted those dif