Who benefits from minority business set-asides? The case of New Jersey
Race-based remedies often are justified by evidence of prior discrimination. They work when they benefit groups previously disadvantaged. This article examines one such remedy-minority business set-asides-and its application in the award of public procurement and construction contracts by the state of New Jersey. Analyzed are contract awards to minority and non-minority|non-women-owned business enterprises in 1990, as well as in periods before, during, and after the imposition of a state minority set-aside program. Using a conventional decomposition approach, the article reveals significant discriminatory gaps in the success of minority- versus non-minority-owned firms in obtaining contracts from the state of New Jersey. The analysis suggests that minority contracting success rates fell from the pre-set-aside era to the set-aside era and that discriminatory outcomes persisted. The particular remedy chosen-while justified based on evidence of prior discrimination-appears not to have reduced the original discrimination nor did it unambiguously benefit minority businesses.
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Volume (Year): 15 (1996)
Issue (Month): 2 ()
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- Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
- Knight, Kenneth E & Dorsey, Terry, 1976. "Capital Problems in Minority Business Development: A Critical Analysis," American Economic Review, American Economic Association, vol. 66(2), pages 328-31, May.
- Faith Ando, 1988. "Capital issues and the minority-owned business," The Review of Black Political Economy, Springer, vol. 16(4), pages 77-109, March.
- Timothy Bates, 1981. "Effectiveness of the small business administration in financing minority business," The Review of Black Political Economy, Springer, vol. 11(3), pages 321-336, March.
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