Racial Discrimination in the Labor Market
Paper Session
Sunday, Jan. 8, 2023 10:15 AM - 12:15 PM (CST)
- Chair: Ian M. Schmutte, University of Georgia
The Boss is Watching: How Monitoring Decisions Hurt Black Workers
Abstract
African Americans face shorter employment durations than similar whites. We hypothesize that employers discriminate in acquiring or acting on ability-relevant information. In our model, monitoring black but not white workers is self-sustaining: new black hires are more likely to have been screened by a previous employer, causing firms to discriminate in monitoring. We confirm our predictions that the layoff hazard is initially higher for black workers but converges to that for non-black workers and declines with AFQT more sharply for black workers. Two additional predictions, lower lifetime incomes and longer unemployment durations for black workers, are known to be empirically supported.Technological Change and Racial Disparities
Abstract
The wage gap between black and white Americans has narrowed between the 1960s and the 1970s, but its progress stalled since 1980. This study argues that routine biased technological change (RBTC) contributed to dampening wage gap convergence in 1980-2000, having a differential impact across races and along the wage distribution. Thus, I present new empirical evidence on occupational patterns by race and on determinants of wage disparities along the wage distribution, and rationalize them with an RBTC model in which firms engage in statistical discrimination. I show that, surprisingly, the share of employment in routine intensive occupations has increased for black workers, in contrast with a significant decrease observed for white workers. I decompose the wage gap changes using the Oaxaca-RIF methodology and show that differences in occupational sorting of the workforce increase wage disparities, thwarting wage convergence between races at the bottom of the wage distribution. Together, these new empirical findings and model provide insights to better understand the mechanisms behind racial disparities at the end of the 20th century.Task-Based Discrimination
Abstract
In this paper, we develop a task-based model of occupational choice to identify and quantify the effect of discrimination and aggregate task prices on the Black-White wage gap over time. At the heart of our framework is the idea that the size and nature of racial barriers faced by Black workers varies by the task requirements of each job. We define a new task that measures the extent to which individuals interact with others as part of their job. Using both the structure of our model, detailed micro data from the Census/ACS and the NLSY, and regional variation in survey-based discrimination measures, we highlight that the racial gap in this new task measure is a good proxy for the extent of taste-based discrimination in the economy. Our structurally estimated model and reduced form evidence attribute the fast decline in the observed Black-White gap in wages between 1960 to 1990 to a notable drop in labor market taste-based discrimination and attributes the stagnation in the Black-White gap in pay since then to the notable increase in the wage premium to Abstract tasks.Discussant(s)
Russell Weinstein
,
University of Illinois-Urbana-Champaign
Evan Kershaw Rose
,
University of Chicago
Conrad Miller
,
University of California-Berkeley
Ian M. Schmutte
,
University of Georgia
JEL Classifications
- J7 - Labor Discrimination