White Privilege or Black Penalty? The Effect of Skin Tone on Income in Mexico.

While scholarship on wage discrimination has confirmed that 'racism' is persistent, recent insights indicate that 'colorism' - the idea that some skin tones are favored while others are disfavored - is able to explain why dark-skinned people have lower incomes than people with a lighter skin complexion. In this paper, theoretical arguments are discussed and are subjected to an empirical test: differential investment in human capital, i.e. education; variation in occupational status, i.e. being employed in indoor vs outdoor jobs; and concentration in richer vs poorer regions. The focus on this paper is Mexico, known as a country where race and ethnicity generally are not salient categories for social stratification, but skin tone is. We study the National Survey on Discrimination in Mexico, collected in 2010 and representative for all households. The advantage of this survey is that it has asked respondents to indicate their skin color. Based on regression analyses and matching techniques, we show that there is an effect of skin tone on income that cannot completely be explained by differences in education, occupational status or regional concentration. Important, we have no indications that darker skin tones are penalized; rather, the two lightest skin tones are privileged, giving evidence to 'colorism', yet, not in the direction that is widely assumed. [ABSTRACT FROM AUTHOR]