Prejudice and Racial Matches in Employment for Low-Skilled Workers Jee-Yeon Lehmann, University of Houston and Timothy Bond, Purdue University
Abstract
The current national poverty rate masks great racial
heterogeneity in the state of poverty in the U.S. According to
the 2010 Census, 27% of blacks live below the official poverty
line, nearly three times the rate for non-Hispanic whites.
Non-labor market factors such as differences in family structure
or geography can explain a significant portion of this disparity,
yet it is difficult to ignore the role of the large and
persisting racial gap in labor market outcomes. Inequality in
labor market performance is especially salient for low-skilled
black workers who face close to 10% lower wages and 25% longer
unemployment durations compared to similar whites (Lang and
Lehmann 2012). For college-educated blacks, however, the wage gap
is virtually non-existent and the employment gap is much smaller.
Understanding the sources of these labor market racial
disparities for lowskilled workers is critical for explaining and
mitigating the high poverty rates among blacks.
In this project, we seek to provide the first theoretical and
empirical analysis of the relation between prejudice and the
rates at which workers match with and separate from same-race
employers and its impact on the wage and employment dynamics of
low-skilled black workers. We test the predictions from the model
using a uniquely created dataset that links multiple confidential
data sources with information on regional levels of prejudice,
employer race, and earnings and employment histories of workers.
Results from our study will greatly inform our understanding of
the varying levels of limited employment opportunities afforded
to low-skilled blacks across the U.S. and the sources of
persistent low earnings and employment that contribute to greater
rates of poverty among black Americans.
Jee-Yeon Lehmann is an Assistant Professor of Economics at the
University of Houston. Her research focuses on understanding of
the causes and consequences of inequalities and discrimination in
the labor and legal markets.
Timothy N. Bond is an Assistant Professor of Economics in the
Krannert School of Management at Purdue University. He has
studied a wide-range of topics in labor economics, including the
consequences of arbitrary scaling assumptions on the black-white
achievement gap, the reasons for heterogeneous promotion behavior
across firms, and the impact of geographically asymmetric
information on intergenerational mobility. He received his PhD in
economics from Boston University in 2012.
