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  5. Racial Inequality in Housing and Labor Markets
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Racial Inequality in Housing and Labor Markets

Paper Session

Friday, Jan. 7, 2022 3:45 PM - 5:45 PM (EST)

Hosted By: American Economic Association
  • Chair: William E. Spriggs, Howard University

Racial Inequality and Minimum Wages in Frictional Labor Markets

Jesse Wursten
,
KU Leuven
Michael Reich
,
University of California-Berkeley

Abstract

Since state minimum wage increases after 1990 concentrated in richer and whiter states, the policies could have increased racial wage gaps. We find that minimum wage increases reduced 2019 racial wage gaps-- by 12 percent among all workers and 60 percent among less-educated workers-- but not because of initial racial wage differences. We present a model in which minimum wages assist the job search of workers who do not own automobiles and who live farther from better-paying jobs. Our causal results show the policies increased automobile commuting among black workers, but not white workers, thereby improving black job opportunities

The Effects of the 1930s HOLC “Redlining” Maps

Daniel Aaronson
,
Federal Reserve Bank of Chicago
Daniel Hartley
,
Federal Reserve Bank of Chicago
Bhashkar Mazumder
,
Federal Reserve Bank of Chicago

Abstract

This study uses a boundary design and propensity score methods to study the effects of the 1930s-era HOLC “redlining” maps on the long-run trajectories of urban neighborhoods. The maps led to reduced homeownership rates, house values, and rents and increased racial segregation in later decades. A comparison on either side of a city-level population cutoff that determined whether maps were drawn finds broadly similar conclusions. These results suggest the HOLC maps had meaningful and lasting effects on the development of urban neighborhoods through reduced credit access and subsequent disinvestment

Differential Effects of Labor Tightening on the Black-White Wage Gap the Role of the Minimum Wage

Sarah AlHaif
,
Howard University

Abstract

A rising tide does not lift all boats equally. During the expansion from the Great Recession, Black wage growth lagged that of whites. While lower unemployment rates and the increased transition of workers from unemployment to employment is correlated with rising wages, this effect is through the correlation of job-to-job transitions on wages that increase as the labor; the actual mechanism is the increase in job-to-job transitions. But, the minimum wage is important as a reservation wage and because increases in the minimum wage cause wage compression within firms create wage pressures on job-to-job transitions. But, these pressures have different results by race, because of differences in job-to-job transitions and because of differences between minimum wage increases occur by race; Black workers disproportionately live where minimum wages have not increased. This paper decomposes those different effects.

Discussant(s)
Maria Luengo-Prado
,
Federal Reserve Bank of Boston
Marcus Casey
,
University of Illinois-Chicago
Marco Tabellini
,
Harvard University
JEL Classifications
  • J7 - Labor Discrimination
  • R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location