Interfirm Segregation and the Black/White Wage Gap
This paper studies interfirm racial segregation in two newly developed firm-level databases. Within the representative MSA, we find that the interfirm distribution of black and white workers is close to what would be implied by the random assignment of workers to firms. However, we also find that black workers are systematically clustered in "black" employers where managers, owners, and customers are also black. These facts may be reconciled by the facts that a) there are not enough black employers to generate much segregation and that b) perhaps other difficult-to-identify forces serve to systematically integrate black and white workers. Finally, we find that the black/white wage gap is entirely a within-firm phenomenon, as blacks do not work in firms that pay low wages on average.
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- John Bound & Richard B. Freeman, 1992. "What Went Wrong? The Erosion of Relative Earnings and Employment Among Young Black Men in the 1980s," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 201-232.
- John Bound & Richard B. Freeman, 1991. "What Went Wrong? The Erosion of Relative Earnings and Employment Among Young Black Men in the 1980s," NBER Working Papers 3778, National Bureau of Economic Research, Inc.
- William J. Carrington & Kenneth R. Troske, 1995. "Gender Segregation in Small Firms," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 503-533.
- Higgs, Robert, 1977. "Firm-Specific Evidence on Racial Wage Differentials and Workforce Segregation," American Economic Review, American Economic Association, vol. 67(2), pages 236-245, March.
- James F. Ragan & Carol Horton Tremblay, 1988. "Testing for Employee Discrimination by Race and Sex," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 123-137. Full references (including those not matched with items on IDEAS)
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