We also give insights on why the college wage premium for the non-whites has a greater magnitude than the whites. First, a factor which could contribute to the wider gap among the non-whites than the white is the differences in the geographical locations between race. In the United States, a higher proportion of low income earners are non-whites. For instance, (xxx finds evidence that about xxx% of non-whites and axxx% of whites fall into low income group). Because of the residential segregation or non-whites self-selecting themselves into rural or less developed districts, most of them are compelled to send their wards to schools of low standard. This affects individuals’ schooling decisions in terms of their preparation towards college. Since the schools attended by these individuals are of poor quality, there is little motivation for them to continue college upon graduating from the high school. The economic implication of many non-white high school graduates is being translated in the job market. Theoretically, in the labor market, equilibrium is established when the wage rate equals the marginal productivity of labor. At times, some employers who have no prior knowledge on the experiences or how productive an individual will be decide on productivity levels based on type of school attended. The argument is that an individual from a higher quality school is an indication of a higher productivity than the one from low quality school.