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What Happens to Contractors After States Ban Affirmative Action?

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  • Benjamin V. Rosa

Abstract

Using restricted Census business records, I explore how banning affirmative action in state contracting affects minority- and women-owned business enterprises (MWBEs). I find that ending affirmative action led MWBE contractors to gradually downsize, with the most pronounced reductions in force experienced by Black-owned businesses and larger MWBEs. Despite these workforce changes, existing MWBEs were no more likely to shut down than other businesses. New MWBEs were relatively less common after a state’s ban, highlighting how bans can shift the demographic composition of new contractors. A calibrated model suggests bans are equivalent to considerable reductions in MWBE productivity and scrap values.

Suggested Citation

  • Benjamin V. Rosa, 2026. "What Happens to Contractors After States Ban Affirmative Action?," Working Papers 26-41, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:26-41
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    Keywords

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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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