Racial income inequality continues to be a major problem in the US. To devise a coherent policy response, this persistent inequality must be understood in its historical context. This column uses data from over 130 years to suggest a model in which income in the US is a function of racial identity and human capital. While racial identity is transmitted inter-generationally, human capital is also affected by race, for example through educational attainment. Furthermore, shifts in labour market prices inhibit the convergence of wages across race.
Robert A Margo, 08 June 2016
Allison Shertzer, Randall Walsh, 19 May 2016
US cities became increasingly segregated by race over the 20th century. General consensus holds that most of this segregation was concentrated in the post-war period. This column uses neighbourhood-level data to find that racial segregation in cities began earlier; indeed, much of it had taken place by 1930. The column also examines the residential response of whites to black arrivals, suggesting that this contributed to segregation in addition to discrimination and institutional factors.
Lisa D. Cook, Trevon D. Logan, John M. Parman, 13 November 2015
Much research has gone into trying to establish a connection in the US between having a distinctively black name and disadvantage over a lifetime. This column highlights a striking difference between the historical effects of having a black name and today’s effects. While modern black names show up in modern empirical studies as an albatross around the neck of those possessing them, either because those with such names come from worse socioeconomic conditions or face discrimination later in life, historical black names conveyed a large advantage accumulating over an individual’s lifetime.
Huailu Li, Kevin Lang, Kaiwen Leong, 28 August 2015
Economic models suggest that competition will prevent those subjected to discrimination from being affected adversely. This column uses an unusual case study of sex workers in Singapore to reveal that having many actors on both sides of the market does not, in fact, eliminate discrimination. Policy intervention remains the best tool to end price discrimination.
Elizabeth Ananat, Shihe Fu, Stephen L. Ross, 28 June 2015
The black-white wage gap persists. Year after year, data tell us that black workers in the US earn less than their white counterparts. This column presents new evidence focused on the notion of race-specific social networks and ‘knowledge spillovers’. Data suggest that a black worker may be less able than an otherwise similar white worker to enjoy knowledge spillovers that arise in predominantly white work environments, suppressing their earnings.
Trevon D. Logan, John M. Parman, 09 March 2015
Racial disparities in socioeconomic conditions remain a major policy issue throughout the world. This column applies a new neighbour-based measure of residential segregation to US census data from 1880 and 1940. The authors find that existing measures understate the extent of segregation, and that segregation increased in rural as well as urban areas. The dramatic decline in opposite-race neighbours during the 20th century may help to explain the persistence of racial inequality in the US.
Pierre Deschamps, José de Sousa, 13 February 2015
Racial wage discrimination can proliferate in labour markets with large frictions because workers facing discrimination find it difficult to relocate. This column presents evidence of the interaction between frictions and discrimination in the English Premier League, the top tier of English football, using the 1995 Bosman ruling as an exogenous shifter. Before the ruling, wage discrimination resulted in teams with more black players outperforming competitors with equivalent payrolls. The decrease in frictions associated with the ruling allows players to escape discrimination by relocating.
Emily Nix, Nancy Qian, 26 January 2015
Race is usually treated as a fixed, exogenous characteristic in academic studies and policy discussions, but a growing body of evidence calls this assumption into question. This column presents evidence from historical US census data that more than 19% of black males ‘passed’ as white, around 10% of whom later ‘reverse-passed’ to being black. Passing was associated with geographic relocation and with better political-economic and social opportunities for whites relative to blacks, providing prima facie evidence that passing was endogenous.
Laurent Gobillon, Peter Rupert, Étienne Wasmer, 23 July 2013
The unemployment rate in France is roughly six percentage points higher for African immigrants than for natives. Why? This column argues that the explanation is spatial: recent immigrants tend to have much longer commute times. Research suggests that in the region of 20% of the employment gap between the French minority and the French majority can be put down to commute times, but more research is needed, especially in France where research into the ethnic unemployment gap is scarce.
Graziella Bertocchi, Arcangelo Dimico, 22 July 2012
We evaluate the empirical relevance of de facto vs. de jure determinants of political power in the U.S. South between the end of the nineteenth and the beginning of the twentieth century. Our results indicate that de jure voting restrictions reduce black registration but that black disfranchisement starts well before 1890 and is more intense where a black majority represents a threat to the de facto power of white elites.
Karla Hoff, 24 April 2012
For some, affirmative action is righting one wrong by committing a wrong against another group. But this column presents new theory and evidence suggesting that the influence of social stigma on a person’s self-confidence, self-development and their ultimate success should not be ignored.
Romain Rancière, Amine Ouazad, 16 March 2012
Did the rise in subprime mortgages – predominantly to black and Hispanic borrowers – lead to a fall in racial segregation as people were able to move to more desirable neighbourhoods? This column looks at extensive data on mortgages and changes in the ethnic mix at local schools. It finds that the credit boom that precipitated the global financial crisis may actually have increased racial segregation.
Leah Boustan, Robert A Margo, 12 February 2011
Economists and sociologists have long maintained that mass movement of whites to US suburbs harmed remaining inner city residents by reducing the tax base and fostering isolated racial enclaves. This column argues that white suburbanisation had a silver lining – it indirectly contributed to the rise in black homeownership.
Jennifer Doleac, Luke C.D. Stein, 29 June 2010
Do buyers discriminate based on race? This column describes an experiment in the US that advertised iPods online from black and white sellers. Black sellers received fewer offers at lower prices, doing better in markets with competition amongst buyers and worse in high-crime markets. The authors find evidence of both statistical and taste-based discrimination.