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Population Processes and Establishment-Level Racial Employment Segregation

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The abstract for this document is available on CSA Illumina.To view the Abstract, click the Abstract button above the document title.
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It is common for scholars interested in race and poverty to invoke a lack of access to job networks as one of the reasons that African Americans and Hispanics face difficulties in the labor market. Much research has found, however, that minorities do worse when they use personal networks in job finding. Research in this area has been hampered by the complicated and multi-step nature of the job-finding process and by the lack of appropriate comparison data for demonstrating the various ways in which minorities can be isolated from good job opportunities. We seek to specify what it means to say that minorities are cut off from job networks. Building on the literature on social networks in the labor market, we delineate the various mechanisms by which minorities can be isolated from good job opportunities. We examine how these mechanisms operate, using unique data on the chain of network contacts that funnel to an employer offering desirable jobs. We find that network factors operate at several stages of the recruitment process. We find scant evidence, however, that these network factors serve to cut off minorities from employment in this setting. We conclude with a discussion of the theoretical and methodological implications of the case for the study of networks, race, and hiring.
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Bell System Technical Journal, also pp. 623-656 (October)
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▪ Abstract This chapter reviews research on the determinants and consequences of race and sex composition of organizations. Determinants include the composition of the qualified labor supply; employers' preferences, including the qualifications they require; the response of majority groups; and an establishment's attractiveness, size, and recruiting methods. The race and sex composition of an establishment affects workers' cross-group contact; stress, satisfaction, and turnover; cohesion; stereotyping; and evaluation. Composition also affects organizations themselves, including their performance, hiring and promotion practices, levels of job segregation, and wages and benefits. Theory-driven research is needed (a) on the causal mechanisms that underlie the relationships between organizational composition and its determinants and consequences and (b) on the form of the relationships between organizational composition and workers outcomes (e.g., cross-group contact, cohesion, turnover, etc). Research is nee...
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Publisher Summary The chapter presents a survey on the economics of labor market discrimination, motivated by two fundamental problems associated with income and wage differences among groups classified by sex, race, ethnicity, and other characteristics. The first is the inequity of long-lasting differences in economic well-being among the groups; in particular, differences in household or family income. The second is the inequity of long-lasting differences in the average wage rates among groups of workers classified by these demographic traits, when the groups may be presumed to be either equally productive or to have equal productive capacity. The second problem also raises the question of whether a labor market that pays unequal wages to equally productive workers is inefficient. Economic discrimination is defined in terms of income differences among families and wage differences among workers. The chapter discusses these definitions and presents data from the United States on the income and earnings differences of blacks, Hispanics, whites, women, and men. The chapter surveys theories of economic discrimination in the labor market. The theories are classified into competitive and monopolistic neoclassical models with (essentially) complete information, competitive neoclassical models with imperfect information-leading to “statistical discrimination,” and institutional theories. The chapter concludes with a discussion of the policy implications of the economic research on discrimination.
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This paper studies interfirm racial segregation in two newly developed firm-level databases. Within the representative MSA, we find that the interfirm distribution of black and white workers is close to what would be implied by the random assignment of workers to firms. However, we also find that black workers are systematically clustered in "black" employers where managers, owners, and customers are also black. These facts may be reconciled by the facts that a) there are not enough black employers to generate much segregation and that b) perhaps other difficult-to-identify forces serve to systematically integrate black and white workers. Finally, we find that the black/white wage gap is entirely a within-firm phenomenon, as blacks do not work in firms that pay low wages on average.