The Review of Economics and Statistics Vol. XCVII MARCH 2015 Number 1 ON THE BLURRING OF THE COLOR LINE: WAGES AND EMPLOYMENT FOR BLACK MALES OF DIFFERENT SKIN TONES Daniel Kreisman and Marcos A. Rangel* Abstract—We evaluate the role skin color plays in earnings and employment for black males in the NLSY97. By applying a novel, scaled measure of skin tone to a nationally representative sample and by estimating the evolution of labor market differentials over time, we bridge a burgeoning literature on skin color with more established literatures on wage differentials and labor market discrimination. We find that while intraracial wage gaps widen with experience, gaps between the lightest-skinned black workers and whites remain constant, suggesting that a blurring of the color line elicits subtle yet meaningful variation in earnings differentials over time. I. Introduction N EARLY a half-century since the passage of civil rights legislation in the United States, it remains clear that black workers earn less on average than their white peers with similar observable skills, education, background char- acteristics, and experience. While numerous contributions to the economics literature benchmark these labor market differentials across race, significantly fewer studies address disparities that emerge within the African American com- munity itself. 1 Some recent evidence implies associations between perceived “whiteness” for black Americans and labor market outcomes, including racially distinct first names (Bertrand & Mullainathan, 2004; Fryer & Levitt, 2004), facial features (Belleti & Wade, 2008), speech patterns (Grogger, 2011) or simply “acting white” (Austen-Smith & Fryer, 2005; Fryer & Torelli, 2009). We add to this literature by estimating Received for publication June 30, 2012. Revision accepted for publication September 6, 2013. Editor: Amitabh Chandra. * Kreisman: Georgia State University; Rangel: Duke University. This research project and the data collection attached to it would not have been possible without the support from Dan Black and Robert T. Michael. We are also grateful to a number of the University of Chicago’s admin- istrative staff who were kind enough to share their views on the role of complexion within the African American community in South Chicago. We thank Cynthia Cook-Conley in particular. Thanks are due to Dan Black, Kerwin Charles, William Darity Jr., Jeffrey Grogger, Ricardo Madeira, Ann Morning, and Heleno Pioner for comments on earlier drafts. We are also thankful for comments from participants of the Population Association of America Meeting (2011) and workshops at the Harris School, the Uni- versity of São Paulo, and the University of Maryland. M.R. performed some of the work that appears here while visiting Princeton University’s Research Program in Development Studies and Program in Latin Ameri- can Studies. Their hospitality is gratefully acknowledged. The usual caveat applies. 1 See Carneiro, Heckman, and Masterov (2005), Lang and Lehmann (2012), Neal and Johnson (1996), O’Neil (1990), and Ritter and Taylor (2011). the relationship between labor market outcomes and the most salient indicator of race in the United States: skin tone. To accomplish this, we employ novel data on skin tone collected as part of this project in the 2008 wave of the National Longitudinal Study of Youth (NLSY97). While this is not the first study to examine the relationship between skin color and labor market outcomes (see Hersch, 2006, 2008; Hughes & Hertel, 1990; Goldsmith & Darity, 2007), we present three significant advantages over previous efforts: first, we make use of a common, standardized visual measure of skin tone used by all interviewers; second, we apply this measure to a nationally representative sample of early-career black and white males with detailed records of background characteristics, skill accumulation, and labor market out- comes; third, we exploit the panel nature of our data to observe the evolution of wage gaps over the early careers of these respondents. Our empirical specifications examine the salience of gaps in wages and employment across skin color for black respon- dents that cannot be explained away by differences in background characteristics or observable measures of pro- ductivity. By nesting skin color within race, allowing us to compare inter- with intra-racial gaps in labor market outcomes, we are able to interpret our results regarding complexion differentials with respect to the more developed literature on racial inequality. We begin, following a tradition initiated with Neal and Johnson (1996), by including measures of skills accumu- lated before individuals become active in the labor market and observing the residual differences in employment and wages that emerge during the interaction between suppliers and demanders of labor. We build on these results, following Oettinger (1996) and Altonji and Pierret (2001), by inter- acting race and skin color with measures of labor market experience, allowing us to view the evolution of wage dis- parities as workers accumulate skill and match quality is revealed. We find that while the lightest third of the black complex- ion distribution earn more than the median group, there is no skin color differential between the median and darkest ter- ciles, suggesting a negative, nonlinear relationship between skin color darkness and wages for black men. While con- trolling for a host of background characteristics, childhood circumstances, education, and a measure of skill reduces the The Review of Economics and Statistics, March 2015, 97(1): 1–13 © 2015 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology doi:10.1162/REST_a_00464