The Role of Social Costs in Response to Labor Market Opportunities: Differences across Race
July 14, 2023
Summary
Investigating the role that migration constraints play in racial/ethnic disparities in the labor market, the authors of this working paper find that Black workers are typically less responsive than White workers to changes in job opportunities, though their responsiveness increases when job opportunities are in locations with a higher share of their own racial/ethnic group.
View PaperWorking Paper 2023-7
Abstract: Using the American Community Survey between 2005 and 2019, this paper investigates the role constraints to migration might play in explaining racial/ethnic disparities in the labor market. We find that Black workers are typically less responsive than White workers to changes in job opportunities, but responsiveness increases when those opportunities present themselves in locations with a higher share own-minority population. We construct an education/race specific Bartik shift-share instrument to control for potential endogeneity of growth in job opportunities.
JEL classification: J61, J15, J18
Key words: racial labor market disparities, migration costs, Delta index, social costs, place-based, people-based, mismatch
Digital Object Identifier: https://doi.org/10.29338/wp2023-07
Kalee Burns's contribution was made as part of her completed PhD studies at Georgia State University (GSU). Research assistance from Ellyn Terry and Sarah Akynea is much appreciated, and the authors also thank David Altig, Stuart Andreason, Melissa Banzhaf, Benjamin Griffy, Jordan Herring, Osborne Jackson, Janna Johnson, Hyun Yeol Kim, Christos Makridis, Brent Meyer, Federico Mandelman, Victor Hernandez Martinez, Tom Mroz, Melinda Pitts, John Robertson, Abigail Wozniak, and participants of the economics seminar series at Lafayette College, the Federal Reserve Bank (FRB) system's regional economics conference, and the FRB and GSU brown-bag series for helpful comments and suggestions. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Please address questions regarding content to Kalee E. Burns of the Social, Economic and Housing Statistics Division, US Census Bureau, 4600 Silver Hill Road, Suitland, MD, 20746; or Julie L. Hotchkiss, Federal Reserve Bank of Atlanta and Georgia State University, Research Department, 1000 Peachtree St. NE, Atlanta, GA 30309.
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