Race, human capital, and wage discrimination in STEM professions in the United States

Purpose - The purpose of this paper is to examine how human capital affects the racial wage gap of science, technology, engineering, and mathematics (STEM) professionals, controlling for labor market characteristics and argue that human capital of minority STEM professionals is valued less than their White counterparts, even when minorities have similar levels of human capital. Design/methodology/approach - Data for this study were obtained from the American Chemical Society (ACS) 2005 census of its membership and consisted of 13,855 male chemists working full-time in industry - there were too few minority women to make comparisons. The racial wage gap was decomposed by modeling earnings as an exponential function of race, education, marital status, children, experience, employment disruption, work specialty, work function, industry, size of employer, and region of work. Findings - This research shows that there is racial discrimination in STEM professions. Although there is variation among racial groups, minority chemists receive lower wages than White chemists. For Asian and Black chemists, the wage differential is largely due to discrimination. The case may be different for Hispanic chemists. Most of the difference in wages between Hispanics and Whites was explained by the lower educational attainment and experience of Hispanic chemists. Practical implications - Because the racial wage gap is largely due to racial differences in the return on human capital, public and private efforts to increase human capital of potential minority scientists have a limited impact on the racial wage gap. Eliminating the differential returns to human capital would drastically reduce the racial wage gap - except for Hispanics. Achieving racial pay equity is one important step towards eliminating racial discrimination in the STEM workforce. Originality/value - This paper shows the role of human capital in explaining the racial wage gap in STEM professions.