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Spatial factors and the employment of blacks at the firm level

  • Harry J. Holzer
  • Keith R. Ihlanfeldt

In this paper we use data from a new survey of over 3,000 employers in four major metropolitan areas to investigate the determinants of black employment and wages at the firm level. We focus specifically on two factors that are likely to influence the spatial distribution of black employment: the proximity of firms to the residential locations of various racial groups and to public transit. We also consider the effects on black employment of other factors, such as employers' skill needs and some likely determinants of their preferences across groups. Our main finding is that employers' proximity to black residences and to public transit increases the likelihood that they will hire black employees. This is true even when we include detailed controls for the skills needed by employers and also for the race of customers and of those responsible for hiring, which independently affect the levels of black employment at firms. Proximity to public transit and especially to black residences accounts for major portions of the higher black employment rates at central-city than suburban firms. The residential effects are relatively strong for employers who recruit through informal methods and weak for those who use newspapers, thus suggesting that information may play a role in the distance effects. We also find some evidence that employers' proximity to black residential populations results in lower wages for workers.

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Article provided by Federal Reserve Bank of Boston in its journal New England Economic Review.

Volume (Year): (1996)
Issue (Month): May ()
Pages: 65-86

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Handle: RePEc:fip:fedbne:y:1996:i:may:p:65-86
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  1. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
  2. Nardinelli, Clark & Simon, Curtis, 1990. "Customer Racial Discrimination in the Market for Memorabilia: The Case of Baseball," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 575-95, August.
  3. Hughes, Mark Alan & Madden, Janice Fanning, 1991. "Residential segregation and the economic status of black workers: New evidence for an old debate," Journal of Urban Economics, Elsevier, vol. 29(1), pages 28-49, January.
  4. Card, David & Lemieux, Thomas, 1994. "Changing Wage Structure and Black-White Wage Differentials," American Economic Review, American Economic Association, vol. 84(2), pages 29-33, May.
  5. Derek A. Neal & William R. Johnson, 1995. "The Role of Pre-Market Factors in Black-White Wage Differences," NBER Working Papers 5124, National Bureau of Economic Research, Inc.
  6. Bound, John & Freeman, Richard B, 1992. "What Went Wrong? The Erosion of Relative Earnings and Employment among Young Black Men in the 1980s," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 201-32, February.
  7. Ihlanfeldt, Keith R & Sjoquist, David L, 1990. "Job Accessibility and Racial Differences in Youth Employment Rates," American Economic Review, American Economic Association, vol. 80(1), pages 267-76, March.
  8. Jonathan S. Leonard, 1984. "The Interaction of Residential Segregation and Employment Discrimination," NBER Working Papers 1274, National Bureau of Economic Research, Inc.
  9. O'Regan, Katherine M. & Quigley, John M., 1996. "Spatial Effects Upon Employment Outcomes: The Case of New Jersey Teenagers," Department of Economics, Working Paper Series qt6cw7b2w7, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  10. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  11. O'Neill, June, 1990. "The Role of Human Capital in Earnings Differences between Black and White Men," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 25-45, Fall.
  12. Ihlanfeldt, Keith R & Young, Madelyn V, 1996. "The Spatial Distribution of Black Employment between the Central City and the Suburbs," Economic Inquiry, Western Economic Association International, vol. 34(4), pages 693-707, October.
  13. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  14. Carrington, William J & Troske, Kenneth R, 1998. "Interfirm Segregation and the Black/White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 231-60, April.
  15. William J. Carrington & Kristin McCue & Brooks Pierce, 2000. "Using Establishment Size to Measure the Impact of Title VII and Affirmative Action," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 503-523.
  16. Harry J. Holzer, 1986. "Informal Job Search and Black Youth Unemployment," NBER Working Papers 1860, National Bureau of Economic Research, Inc.
  17. Holzer Harry J. & Ihlanfeldt Keith R. & Sjoquist David L., 1994. "Work, Search, and Travel among White and Black Youth," Journal of Urban Economics, Elsevier, vol. 35(3), pages 320-345, May.
  18. Ihlanfeldt, Keith R., 1997. "Information on the Spatial Distribution of Job Opportunities within Metropolitan Areas," Journal of Urban Economics, Elsevier, vol. 41(2), pages 218-242, March.
  19. Zax, Jeffrey S., 1991. "Compensation for commutes in labor and housing markets," Journal of Urban Economics, Elsevier, vol. 30(2), pages 192-207, September.
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