Occupational Assimilation and the Competitive Process: A Reanalysis

Abstract

A recent article reports negative correlations for several major occupation between income of white males and percentage Negro. The results are interpreted as tentative confirmation of the hypothesis that Negro workers pose a competitive threat to the earnings of white workers. Reanalysis of the original cross-sectional regressions, taking account of additional confounding variables, reduces the effect of percentage Negro on income of white workers to insignificance for all major occupations except professional workers. Among professionals, discriminatory barriers to entry and a pattern of segregated clientele are proposed as better explanations than "competition." Reanalysis of the original logitudinal regression, again adding confounding variables, reduces to insignificance the effect of change in percentage Negro on change in income. An alternative mode of analysis designed to capture more precisely any effect of competition in local labor markets similarly reveals no association. A cross-sectional analysis using percentage Negro in an occupation as the dependent variable leads to an emphasis on processes of segregation rather than of competition. A review of the economic theory underlying the notion of competition indicates weaknesses in the original formulation and demonstrates that the original mode of analysis is inadequate for choosing among alternative interpretations of the results.