Obstacles to Employment

1
Obstacles to Employment
2
Preliminaries

• Evidence of some wage discrimination for black
  men. No evidence of wage discrimination against
  black women, Latinos or Asians
• Differences in employment rates and occupational
  segregation suggests that access to jobs is the
  real issue
• Focus has shifted to reasons for the differences
  in employment etc.

3
Explanations

• Skills Mismatch
• Spatial Mismatch
• Differences in reservation wage
• Weak employment networks
• Employer recruitment practices
• Racial discrimination

4
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.
• Question about technology. Is digital divide a
  contributing factor?

5
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?

6
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.

7
Racial Discrimination

• Audit Studies
• Urban Institute studies
• Black men three times more likely to be turned
  down for a job than white men
• Hispanic males three times more likely to
  experience discrimination
• Black hired over white in less than 10 of cases
• Fair Employment Council Studies
• White testers close to 10 more likely to receive
  interviews than blacks
• Among those interviewed, 1/2 of white testers
  received job offers versus 11 of black testers

8
Criticisms of Audit Studies

• Evidence of discrimination in major audit studies
  concentrated in one city
• Audits ignore unobservable productivity
  differences that employers can see.
• Audits send applicants to respond to jobs
  advertised in newspapers Most entry level jobs
  are not filled this route.

9
Racial Discrimination

• Names Study
• Created artificial resumes based on real resumes
• 4 occupational categories - clerical, sales,
  administrative support and customer services
• 2 cities - Boston Chicago
• Used Name Frequency data to identify names that
  are uniquely African American
• Potential Problems
• Crude outcome measures
• Newspaper ads not only way of finding jobs
• Names proxy for unobserved productivity
  differences

10
Findings

• White sounding names more likely to get call
  backs
• Enhanced credentials do not help African American
  names as much as white name
• A better address has minimal effect for resumes
  with African American sounding names

11
Limitations of Names Study

• Newspaper ads/

12
Jobs Competition Model

• There are queues of qualified workers for
  available jobs. The queues are organized by race
  and sex
• Employers may exercise their preferences for
  particular worker types with little or no loss in
  profits. As queues get shorter, costs of
  discrimination increase.
• Black male workers are least preferred

13
Effects of Immigration