…we focus on individuals who “passed for White,” an important social phenomenon at the time. To do so, we identify individuals coded “Mulatto” as children but “White” as adults. Passing meant that individuals changed their racial affiliation by changing their social presentation while skin color remained unchanged. Comparing passers to their siblings who did not pass, we find that passing was associated with substantially higher earnings, suggesting that social presentations of race could have significant consequences for economic outcomes

We find that about 10–13% of 1910 Mulattoes were classified as White in 1940, and Mulattoes who passed for White earned 31–42% more than non-passers. Because passers tended to be more educated than non-passers, the increase in earnings from being classified as White decreases when we control for education, though it remains considerable at 20–31%… Passers earned 14–21% more than their brothers who did not pass.

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