Evidence of discrimination by preference in Brazil

Abstract

This paper tests Becker’s model of preference discrimination. Using Brazilian data, we reject the hypothesis that the black-white conditional wage gap is determined by the average degree of employers’ prejudice. Instead, we show that the racial wage gap is related to the degree of prejudice of the marginal employer, i.e., the employer who most discriminates among those who hire blacks. We also found that the wage gap is positively correlated with the proportion of blacks in the labor market, which means that blacks are more discriminated where there is more social interaction among races.