Analyses of ethnic and racial wage differentials neglect the fact that minorities cluster in urban and in more deprived areas. This paper estimates ethnic wage differentials by comparing minorities to the majority in the same local labour market and therefore facing similar socio-economic...

Using data from the U.S. Decennial Census and the National Longitudinal Surveys, we find little evidence of differences in the return to schooling across racial and ethnic groups, even with attempts to control for ability and measurement error biases. While our point estimates are relatively...