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Customer Discrimination and Employment Outcomes for Minority Workers

  • H. J. Holzer
  • K. R. Ihlanfeldt

In this paper we investigate the effects of consumer discrimination on the employment and earnings of minorities, particularly blacks. We do so using data from a new survey of employers in four large metropolitan areas in the United States. Our results show that the racial composition of an establishment’s customers has sizable effects on the race of who gets hired, particularly in jobs that involve direct contact with customers. Although we find evidence of customer discrimination in both predominantly white and black establishments, the net effect of such discrimination appears to be some reduction in overall labor demand and wages for blacks. Evidence is also presented which suggests that the role of customer discrimination may be growing more important over time.

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Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1122-97.

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Handle: RePEc:wop:wispod:1122-97
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  1. Hirsch, B.T. & Macpherson, D.A., 1994. "Wages, Racial Composition, and Quality Sorting in Labor Markets," Working Papers 1994_01_01, Department of Economics, Florida State University.
  2. Ihlanfeldt, Keith R., 1997. "Information on the Spatial Distribution of Job Opportunities within Metropolitan Areas," Journal of Urban Economics, Elsevier, vol. 41(2), pages 218-242, March.
  3. H. J. Holzer & K. R. Ihlanfeldt, . "Spatial factors and the employment of blacks at the firm level," Institute for Research on Poverty Discussion Papers 1086-96, University of Wisconsin Institute for Research on Poverty.
  4. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  5. George J. Borjas & Stephen G. Bronars, 1988. "Consumer Discrimination and Self-Employment," NBER Working Papers 2627, National Bureau of Economic Research, Inc.
  6. Derek A. Neal & William R. Johnson, 1995. "The Role of Pre-Market Factors in Black-White Wage Differences," NBER Working Papers 5124, National Bureau of Economic Research, Inc.
  7. Offner, Paul & Saks, Daniel H, 1971. "A Note on John Kain's 'Housing Segregation, Negro Employment and Metropolitan Decentralization'," The Quarterly Journal of Economics, MIT Press, vol. 85(1), pages 147-60, February.
  8. Ihlanfeldt, Keith R. & Sjoquist, David L., 1989. "The impact of job decentralization on the economic welfare of central city blacks," Journal of Urban Economics, Elsevier, vol. 26(1), pages 110-130, July.
  9. Ihlanfeldt, Keith R & Young, Madelyn V, 1994. "Intrametropolitan Variation in Wage Rates: The Case of Atlanta Fast-Food Restaurant Workers," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 425-33, August.
  10. Bloch, Farrell, 1994. "Antidiscrimination Law and Minority Employment," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226059839.
  11. William Rodgers & William Spriggs, 1996. "What does the AFQT really measure: Race, wages, schooling and the AFQT score," The Review of Black Political Economy, Springer, vol. 24(4), pages 13-46, June.
  12. Neumark, David, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 915-41, August.
  13. Nardinelli, Clark & Simon, Curtis, 1990. "Customer Racial Discrimination in the Market for Memorabilia: The Case of Baseball," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 575-95, August.
  14. Kahn, Lawrence M & Sherer, Peter D, 1988. "Racial Differences in Professional Basketball Players' Compensation," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 40-61, January.
  15. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
  16. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  17. Holzer Harry J. & Ihlanfeldt Keith R. & Sjoquist David L., 1994. "Work, Search, and Travel among White and Black Youth," Journal of Urban Economics, Elsevier, vol. 35(3), pages 320-345, May.
  18. Holzer, Harry J & Katz, Lawrence F & Krueger, Alan B, 1991. "Job Queues and Wages," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 739-68, August.
  19. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ojt, November.
  20. Bergmann, Barbara R, 1971. "The Effect on White Incomes of Discrimination in Employment," Journal of Political Economy, University of Chicago Press, vol. 79(2), pages 294-313, March-Apr.
  21. Keith Ihlanfeldt, 1992. "Job Accessibility and the Employment and School Enrollment of Teenagers," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number jaes, November.
  22. Peter Mieszkowski & Edwin S. Mills, 1993. "The Causes of Metropolitan Suburbanization," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 135-147, Summer.
  23. Kenney, Genevieve M & Wissoker, Douglas A, 1994. "An Analysis of the Correlates of Discrimination Facing Young Hispanic Job-Seekers," American Economic Review, American Economic Association, vol. 84(3), pages 674-83, June.
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