More pay, more inequality? The influence of average wage levels and the racial composition of jobs on the Black-White wage gap

Using an unusually detailed definition of jobs (labor market-occupation-industry cells), I assess whether the Black-White wage gap increases as one ascends the wage hierarchy of local labor markets. Additionally, I test whether the tendency for Black-dominated jobs to pay less than other jobs is stronger among jobs that offer high pay relative to other jobs in the local labor market. There are several important results from the hierarchical linear models. First, there is a substantial net pay penalty associated with Black-dominated jobs, and there is some evidence that this penalty is stronger for Black workers than Whites. Second, the job racial composition effect is weaker among high-paying jobs. In contrast, the net pay gap within jobs is positively associated with the overall pay in a job, implying that ensuring equal access to high-paying jobs will only a partially ameliorate Black-White wage inequality. (C) 2003 Elsevier Inc. All rights reserved.