Racial Differences in Labor Force Status

1
Racial Differences in Labor Force Status
2
Outline

• Demand vs Supply
• Racial differences in labor force participation
  rates of women
• Racial differences in labor market status of
  young men
• Unemployment

3
Historically, Black Women Have Higher Labor Force
Participation Rates Than White Women
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Explanations Consequences

• Explanations
• Marital Status
• Black women less likely to be married with spouse
  present.
• But, racial difference is more pronounced among
  married women.
• Household labor supply model
• Husbands earnings
• Income instability
• Cultural differences
• Consequences

5
Black-White Youth Participation Rates Diverged in
60s
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Explanations

• Skills Mismatch
• Spatial Mismatch
• Differences in reservation wage
• Weak employment networks
• Employer recruitment practices
• Racial discrimination
• High incarceration rates child support
  enforcement

7
Skills Mismatch

• In the 80s and 90s, returns to education,
  experience and to other measures of skill
  increased dramatically. This was a major factor
  contributing to rise in earnings inequality.
• Although educational attainment of blacks
  increased, importance of black/white gap
  increased. Black women lost their experience
  advantage over white women.
• Employer surveys show that employers have low
  opinions of the soft skills of black workers.

8
Spatial Mismatch

• Patterns of residential segregation - blacks live
  closer to inner cities, established jobs in CBD
  Job growth is largely in suburbs
• Lack of access to transportation is barrier to
  employment
• Blacks less likely to adjust to changes in job
  location - why?

9
Recruitment Practices

• Employers use methods with low probability of
  attracting black applicants Minority owned
  businesses are an exception
• Black applicants do no have access to strong job
  networks
• Employers reluctant to hire workers with criminal
  record (including record of arrest) or who have
  been welfare recipients or from neighborhoods
  perceived as having high incidence of these
  activities.

10
Questions to Consider

• How would BPE paradigm explain the increase in
  incarceration rates for young black men?
• Wouldnt issues like spatial mismatch also
  confront black women?