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Past research demonstrates that the estimated size of the federal government earnings differential shrinks substantially with the addition of detailed occupational controls. Possible explanations for this reduction are: controlling for the differing sectoral distributions of common occupations, & controlling for detailed occupations unique to each sector. While occupational detail does not eliminate the federal differential, more than two-thirds of the reduction in the federal differential comes from controlling for unique occupations &, moreover, this is equivalent to excluding all observations in unique occupations. This finding is contrasted with that for the local sector in which the differing distribution of common occupations largely explains the pattern of the differential. 6 Tables, 1 Appendix, 27 References. [Copyright 2004 John Wiley and Sons, Ltd.]

We use a major micro data set to investigate the influence of incentive schemes on wage discrimination against blacks. Incentive schemes which directly link earnings and productivity appear to generally raise earnings, but they increase wages of blacks proportionately more than those of whites. This reduces the residual attributable to discrimination and suggests it is easier to discriminate when earnings are based on perceptions of input (evaluations of effort) rather than on measures of output.