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The Impact of City Contracting Set-Asides on Black Self-Employment and Employment

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  • Chatterji, Aaron K
  • Chay, Kenneth Y
  • Fairlie, Robert W

Abstract

In the 1980s, many U.S. cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimatetheir impacts on the self-employment and employment rates of African-American men. Black business ownership rates increased significantly after program initiation, with the black-white gap falling three percentage points. The evidence that the racial gap in employment also fell is less clear as it is depends on assumptions about the continuation of pre-existing trends. The black gains were concentrated in industries heavily affected by set-asides and mostly benefited the better educated.

Suggested Citation

  • Chatterji, Aaron K & Chay, Kenneth Y & Fairlie, Robert W, 2013. "The Impact of City Contracting Set-Asides on Black Self-Employment and Employment," Santa Cruz Department of Economics, Working Paper Series qt479755b2, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt479755b2
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    Cited by:

    1. Timothy Bates & William D. Bradford & Robert Seamans, 2018. "Minority entrepreneurship in twenty-first century America," Small Business Economics, Springer, vol. 50(3), pages 415-427, March.
    2. Rodrigo Carril & Audrey Guo, 2023. "The impact of preference programs in public procurement: Evidence from veteran set-asides," Economics Working Papers 1876, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Fairlie, Robert, 2020. "The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions," MPRA Paper 113127, University Library of Munich, Germany.
    4. Sameera Fazili, 2019. "Anchor Institution Strategies in the Southeast: Working with Hospitals and Universities to Support Inclusive Growth," FRB Atlanta Community and Economic Development Discussion Paper 2019-2, Federal Reserve Bank of Atlanta.
    5. Robert W. Fairlie & Javier Miranda, 2017. "Taking the Leap: The Determinants of Entrepreneurs Hiring Their First Employee," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 3-34, February.
    6. Aaron K. Chatterji & Kenneth Y. Chay & Robert W. Fairlie, 2014. "The Impact of City Contracting Set-Asides on Black Self-Employment and Employment," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 507-561.
    7. Fairlie, Robert W., 2023. "The Impacts of COVID-19 on Racial Inequality in Business Earnings," IZA Discussion Papers 16412, Institute of Labor Economics (IZA).
    8. Timothy Bates & Joseph Farhat & Colleen Casey, 2022. "The Economic Development Potential of Minority-Owned Businesses," Economic Development Quarterly, , vol. 36(1), pages 43-56, February.
    9. Aaron Chatterji & Edward Glaeser & William Kerr, 2014. "Clusters of Entrepreneurship and Innovation," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 129-166.
    10. Mirjam Strupler Leiser & Stefan C. Wolter, 2017. "Empirical Evidence on the Effectiveness of Social Public Procurement Policy: The Case of the Swiss Apprenticeship Training System," LABOUR, CEIS, vol. 31(2), pages 204-222, June.
    11. Grant H. Lewis, 2017. "Effects of federal socioeconomic contracting preferences," Small Business Economics, Springer, vol. 49(4), pages 763-783, December.
    12. Robert Fairlie & David T. Robinson, 2023. "Racial Differences in Access to Capital for Innovative Start-Ups," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 2(1), pages 149-166.
    13. Robert Fairlie & Robert W. Fairlie, 2023. "The Impacts of Covid-19 on Racial Inequality in Business Earnings," CESifo Working Paper Series 10634, CESifo.
    14. Pan, Mengyang & Hill, James & Blount, Ian & Rungtusanatham, Manus, 2022. "Relationship building and minority business growth: Does participating in activities sponsored by institutional intermediaries help?," Journal of Business Research, Elsevier, vol. 142(C), pages 830-843.
    15. Robert W. Fairlie, 2022. "The Impacts of COVID-19 on Racial Inequality in Business Earnings," NBER Working Papers 30532, National Bureau of Economic Research, Inc.
    16. Simone Schotte & Tharcisio Leone & Rachel M. Gisselquist, 2023. "The impact of affirmative action in India and the United States: A systematic literature review," WIDER Working Paper Series wp-2023-15, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Business; Arts and Humanities; entrepreneurship; affirmative action; self-employment; minorities;
    All these keywords.

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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