RACE AND GENDER DIFFERENCES IN WAGES: The Role of Occupational Sorting at the Point of Hire


*Andrew M. Penner, Department of Sociology, University of California, Irvine, Irvine, CA 92697-5100; e-mail: andrew.penner@ucl.edu


Previous work suggests that occupational sorting and differences in starting salary play a large role in race and gender wage gaps. This study uses unique data from the human resources department of a financial company to examine the role of occupational sorting in race and gender differences in initial salary offers. While this company exhibits large race and gender differences in salary offers, controlling for occupational differences accounts for all of the race effects and reduces the gender effect to substantive insignificance. These findings underscore the importance of occupational sorting mechanisms in creating race and gender differences in wages.