Against All Odds: The Surprising Labor Market Success of Young Mexican Women

Using the NLSY, we find that young Mexican women earn 11.7% less than young White women while young Black women earn 19.2% less than young White women. Although young Mexican women earn less than young White women, they do surprisingly well compared to young Black women. We show that while it is crucially important to account for actual labor market experience, it does not matter if we account for childbirth patterns, and non-linearities in the experience profile. We further show that low labor force attachment is the most important determinant of the Black-White wage differential for young women while education is the most important explanation for the Mexican-White wage gap for young women.