Economic context

New Student Research Builds Evidence on Different Dimensions of Inequality

Joseph BroadusMay 26, 2022

Two years ago, WorkRise grantees Claire Montialoux and Ellora Derenoncourt published a seminal study (PDF) demonstrating that minimum wage expansions during the 1960s and 1970s significantly reduced the racial income and earnings gap during the civil rights era. These expansions were the result of amendments to the Fair Labor Standards Act in 1966, which extended minimum wage protections to a wider array of industries.

Montialoux and Derenoncourt made their case by constructing and analyzing a new database of nearly 100 years of digitized wage records from the US Bureau of Labor Statistics. Their work marked an important contribution to the evidence base on how employment policy can advance or reduce racial disparities in the labor market and promote equitable economic growth.

To build on this work, the researchers, along with colleagues at the University of California, Berkeley, Opportunity Lab and the Princeton University Program for Research on Inequality, are leading a new research initiative on racial disparities in the labor market and on state and federal economic and social policies to reduce these disparities. One goal of the initiative is building a diverse pipeline of researchers. In late 2021, the initiative provided funding support to 10 graduate students pursuing research on racial and ethnic inequality and economic outcomes.

These students presented their early findings at a virtual convening in April. Although their work is still in progress, three themes emerged from the students’ projects:

1. Digitization of historical records can enrich our understanding of the multigenerational effects of policies on economic opportunity

Joan Martinez presented data from more than 81.6 million job postings in the US over a century. Using natural language processing, her research examines job postings in four major US newspapers between 1900 and 2010 to detect how the language of postings before the 1964 Civil Rights Act may have established discrimination patterns in recruitment and hiring that persist today. The work is still ongoing, but preliminary findings show that explicit racial references to African-American workers were more likely to occur in manual-skill job ads before the 1950s.

Along the same lines, Atsushi Yamagishi presented work that drew upon a large, newly digitized dataset from Japan to show how discrimination against Buraku communities has affected land prices and economic opportunities over multiple generations. Yamagishi found that long-term devaluing of land prices in highly concentrated Buraku neighborhoods resulted from widespread and systemic discrimination. This research has relevance to the US, as our society continues to grapple with the long-term effects of redlining and other discriminatory land-use policies and practices.

2. Location and geography strongly influence long-term economic outcomes

Building on a growing body of literature on how location and housing affects people’s opportunities for long-term economic mobility, Hadar Avivi presented work focused on how these outcomes may play out for different racial and ethnic groups. Using an enormous dataset covering the entire Israeli population born between 1950 and 1995, Avivi found substantial variation across ethnic groups, mostly driven by differences in the effects of location choices of recent and more established immigrants. Ultimately, Avivi plans to use this project to better identify how different dimensions of location can predict long-term economic outcomes and to explore implications for housing, education, and other social policies.

Raheem Chaudhry, another student grantee who examined the influence of policies and geography on people’s long-term opportunities, presented work on how the passage of the Voting Rights Act (VRA) affected a range of local responses, including families’ location choices and levels of public expenditures, and how these decisions and investments shaped individual- and family-level measures of economic well-being. Chaudhry’s work will contribute valuable evidence on how race-specific policies may have led to changes in local revenue and investment. His research will also provide more detail on how the VRA effected employment, earnings, and other economic outcomes.

Lukas Althoff presented his research on the geography of Black economic progress after people were enslaved. He documents that modern racial disparities are deeply rooted in the history of racial oppression in the US. Althoff shows that Black Americans whose ancestors were enslaved until the Civil War still have lower levels of educational attainment and less income and wealth than those whose ancestors were free before the Civil War. He provided evidence that the persistence of this disadvantage is not because of their ancestors’ enslavement, but rather their proximity to Jim Crow institutions, which disproportionately affected descendants of enslaved people because of their concentration in the Deep South.

3. Insights from international contexts hold lessons for US labor market policies

The students’ work also highlighted the important role international data has in building our understanding of how historical and ongoing policies affect marginalized communities.

Two students presented work focused on Brazil. Germán Reyes examined the country’s Bolsa Família conditional cash transfer program in which the government of Brazil provided a monthly infusion of cash to more than 14 million families, provided their children attended school and got vaccinated. The program represents the largest conditional cash transfer program to date, and its outcomes hold important lessons for US policymakers for how to best target support to individuals and families with children. Reyes’s research examines how the timing of payments affected student test scores. Preliminary results suggest students whose families received their cash transfer just before the college entrance test perform better, a finding that holds consequences for their long-term opportunities.

Another student drawing on Brazilian data was Caleb Wroblewski, who presented work showing how the demographics of firm owners influence opportunities available to workers. Wroblewski’s work shows that firms with owners of color are more likely to hire more workers of color, that these firms have smaller racial wage gaps, and that their employees are more likely to go on to found firms themselves.

The work presented at the April convening is still at different stages of development but represents an important new commitment to focus more research on the racial dimensions of labor market policies and policies affecting economic opportunity. Over the longer term, this work will contribute to an important growing body of evidence on how we can use economic and social policy to promote more equitable growth.

(Willie B. Thomas/Getty Images)

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