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An Analysis of the Impact of Affirmative Action Programs on Self-Employment in the Construction Industry


  • David G. Blanchflower
  • Jon Wainwright


The main findings of this paper are that despite the existence of various affirmative action programs designed to improve the position of women and minorities in public construction, little has changed in the last twenty five years. We present evidence showing that where race conscious affirmative action programs exist they appear to generate significant improvements: when these programs are removed or replaced with race-neutral programs the utilization of minorities and women in public construction declines rapidly. We show that the programs have not helped minorities to become self-employed or to raise their earnings over the period 1979-2004, using data from the Current Population Survey and the Census, but have improved the position of white females. There has been a growth in incorporated self-employment rates of white women in construction such that currently their rate is significantly higher than that of white men. The data are suggestive of the possibility that some of these companies are 'fronts' which are actually run by their white male spouses or sons to take advantage of the affirmative action programs.

Suggested Citation

  • David G. Blanchflower & Jon Wainwright, 2005. "An Analysis of the Impact of Affirmative Action Programs on Self-Employment in the Construction Industry," NBER Working Papers 11793, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11793
    Note: LE LS

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    References listed on IDEAS

    1. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
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    3. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
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    7. Daniel P. Kessler & Lawrence F. Katz, 2001. "Prevailing Wage Laws and Construction Laborc Markets," ILR Review, Cornell University, ILR School, vol. 54(2), pages 259-274, January.
    8. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003. "Discrimination in the Small-Business Credit Market," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 930-943, November.
    9. Amitabh Chandra & Jonathan Skinner, 2003. "Geography and Racial Health Disparities," NBER Working Papers 9513, National Bureau of Economic Research, Inc.
    10. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
    11. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
    12. David G. Blanchflower & Alex Bryson, 2004. "What Effect Do Unions Have on Wages Now and Would Freeman and Medoff Be Surprised?," Journal of Labor Research, Transaction Publishers, vol. 25(3), pages 383-414, July.
    13. Barry T. Hirsch & Edward J. Schumacher, 2004. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 689-722, July.
    14. Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
    15. Ken Cavalluzzo & Linda Cavalluzzo & John D. Wolken, 1999. "Competition, small business financing, and discrimination: evidence from a new survey," Finance and Economics Discussion Series 1999-25, Board of Governors of the Federal Reserve System (U.S.).
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    17. Robert W. Fairlie & Bruce D. Meyer, 2000. "Trends in Self-Employment among White and Black Men during the Twentieth Century," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 643-669.
    18. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1, January.
    19. David Blanchflower & Alex Bryson, 2002. "Changes over time in union relative wage effects in the UK and the US revisited," NBER Working Papers 9395, National Bureau of Economic Research, Inc.
    20. Smith, James P & Welch, Finis R, 1989. "Black Economic Progress after Myrdal," Journal of Economic Literature, American Economic Association, vol. 27(2), pages 519-564, June.
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    Cited by:

    1. 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.
    2. Blanchflower, David G., 2007. "Entrepreneurship in the United States," IZA Discussion Papers 3130, Institute for the Study of Labor (IZA).
    3. Justin Marion, 2009. "Firm racial segregation and affirmative action in the highway construction industry," Small Business Economics, Springer, vol. 33(4), pages 441-453, December.
    4. John Lunn & Todd Steen, 2016. "Does Disparity in Self-Employment Rates Imply Discrimination? An Empirical Investigation," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Summer 20), pages 41-56.
    5. David Blanchflower, 2009. "Minority self-employment in the United States and the impact of affirmative action programs," Annals of Finance, Springer, vol. 5(3), pages 361-396, June.
    6. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, January.
    7. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 3(4), pages 257-364, July.
    8. Robert Fairlie & Justin Marion, 2012. "Affirmative action programs and business ownership among minorities and women," Small Business Economics, Springer, vol. 39(2), pages 319-339, September.

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    JEL classification:

    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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