Technological Change and Racial Wage Gaps

The wage gap between Black and white Americans narrowed in the 1960s-1970s but stagnated after 1980. This study argues that routine-biased technological change (RBTC) contributed to this stagnation by affecting Black and white male workers differently across the wage distribution. Using new empirical evidence on occupational patterns and wage determinants for these workers, I rationalize these patterns with a novel RBTC theoretical framework. Contrary to expectations, Black workers' employment in routine-intensive occupations increased, while white workers experienced a significant decline. Applying the Oaxaca-RIF decomposition, I show that occupational sorting amplifies wage gaps, particularly at the lower end of the wage distribution. These findings, interpreted through the novel theoretical framework, offer new insights into the mechanisms driving racial wage gaps at the close of the twentieth century.