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Economic Disadvantages Of Blacks In High Black Proportion Cities

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Author Info

  • Cheonsoo Park

    (Ministry of Labor, Republic of Korea)

  • Bong Joon Yoon

    () (Department of Economics, State University of New York at Binghamton)

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    Abstract

    This paper proposes wage premiums for jobs in high black proportion cities as a source of the continuing economic disadvantages for poor blacks. The estimated hedonic model of individual wages confirms the presence of such wage premiums which result in high labor costs and economic stagnation in a black-concentrated region, while the regional black ratio regression indicates a significant statistical correlation between a region¡¯s black ratio and its disamenities. From the empirical results emerge the following conclusions: First, the equality of the estimated wage premiums for high black ratio between blacks and whites precludes direct prejudice-based discrimination. A caveat, however, is that the full wage premiums are conferred upon workers moving freely across regions in search of better wages and amenities, not applying to the mobility-restricted or the non-employed. Second, the wage premiums for high black ratio, causing economic stagnation of a black- concentrated region, constitute a statistical discrimination against blacks. This is because, given the pre-existing poverty among inner city blacks, the victims of the regional economic decline are mainly those unskilled, poor blacks who suffer non-employment due to inadequate resources for job search and mobility.

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    File URL: http://www.jed.or.kr/full-text/28-2/Park.PDF
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    Bibliographic Info

    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 28 (2003)
    Issue (Month): 2 (December)
    Pages: 39-60

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    Handle: RePEc:jed:journl:v:28:y:2003:i:2:p:39-60

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    Related research

    Keywords: Wage Premium; Black-concentrated Region; Statistical Discrimination;

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    1. O'Regan, Katherine M. & Quigley, John M., 1995. "Teenage Employment and the Spatial Isolation of Minority and Poverty Households," University of California Transportation Center, Working Papers qt6vg6961r, University of California Transportation Center.
    2. Clark, David E. & Kahn, James R., 1989. "The two-stage hedonic wage approach: A methodology for the valuation of environmental amenities," Journal of Environmental Economics and Management, Elsevier, vol. 16(2), pages 106-120, March.
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