A Note on School Quality, Educational Attainment and the Wage Gap

This paper explores the linkage between school quality, educational attainment and the wage gap. In a model of statistical discrimination based on both the quality and quantity of schooling, we show that lower-quality education can, on average, lead to lower human capital accumulation if agents anticipate future labor market discrimination. Because blacks in general have less access to good-quality schools compared to whites, this link provides a novel explanation for the differences in black-white educational attainment and the resulting wage gap.