Christopher Daniel claims that statistical disparities...shed little light on this issue [job discrimination] because plausible alternatives to the discrimination hypothesis can be formulated. He asserts that differences in abilities, cultural backgrounds, and occupational choices between Asian immigrants and white civil servants probably explain many of the disparities we described in our previous article (Kim and Lewis, 1994). In this reply, we argue that these differences, while real, are inadequate to explain why Asian Americans remain in lower grades than similarly educated and experienced whites in the federal civil service. We conclude that discrimination provides a more persuasive explanation for the disparities than the plausible alternatives he proposes. Educational Devaluation? Daniel argues that contribution to productivity is often contingent upon and cultural contexts, so immigration can devalue human capital. His hypothetical Vietnamese attorney's legal education does not transfer well to the United States, and his hypothetical Chinese computer programmer's spoken English and interpersonal style limit his advancement possibilities. We agree with Daniel that linguistic competencies matter and proposed that as a possible explanation for why Asian/white grade differences are larger among less educated employees (Kim and Lewis, 1994, 288). Still, not all Asian federal employees are immigrants, and other differences may make the education of Asian Americans more valuable than that of whites. Asian Americans study harder (Peng and Wright, 1994), take more academic course work in high school, and outscore whites on many standardized tests, including the SAT (Scholastic Aptitude Test) (U.S. Department of Education, 1992,124,125,131). Depending on whether language skills, culture, effort, or other differences have the most impact, additional education could plausibly raise grade levels more for whites than Asians. To determine whose education the federal civil service values more, we reanalyzed the 1 percent sample of the Central Personnel Data File (CPDF) described in our earlier article. We found that a year of education raised the average grade of whites by .70 and the average grade of Asians by .88.(1) While Asian immigrants may find their educations devalued, grades rise faster with education for Asian than white federal employees overall. If Daniel's educational devaluation argument applies only to Asian immigrants, its importance depends on how many federally employed Asians are foreign-born. We do not know that number, because the U.S. Office of Personnel Management (OPM) does not gather data on its employees' immigration status. As Daniel notes, veterans' preference and citizenship rides probably mean that Asian federal employees are less likely than Asian Americans generally to be immigrants. Indeed, in the CPDF sample, Asian men were three-quarters as likely as white men to be veterans (35 versus 46 percent). Because almost all veterans were probably born in the United States or moved here as children, this suggests that a sizeable majority of federally employed Asians have lived in this country since childhood, and that the educational devaluation hypothesis applies to a limited number of Asian federal employees. Because almost all veterans should be native or near-native speakers of English, Daniel's argument implies that most Asian American veterans should not suffer educational devaluation. Thus, comparable white and Asian veterans should have more similar grades than do comparable white and Asian federal employees overall (because the latter group includes more immigrants). Reanalysis of the CPDF sample showed that Asian males held positions, on average, .28 of a grade below white males with as many years of education, federal experience, and age. When we restricted the sample to veterans, the grade gap between comparable white and Asian American men more than tripled in size. …