The Emergence, Persistence, and Recent Widening of the Racial Unemployment Gap

Abstract:     
The ratio of black to white unemployment rates is currently in excess of 2 to 1. We show that the racial unemployment gap was small or nonexistent before 1940, widened dramatically during the 1940s and 50s, and widened again in the 1980s. Using available U.S. Census data for the years 1880 to 1990, we decompose changes over time in the unemployment gap to identify the separate contributions of changes in observable worker characteristics and shifts in labor demand. Nearly all of the widening of the gap during the 1940s and 50s can be attributed to regional and industrial shifts of workers and to declining demand in markets where black workers concentrated. Since 1970, improvements in the relative educational status of black workers would have narrowed the unemployment gap slightly, but demand shifts adverse to black worker more that canceled out these gains.

JEL Classification: J64, J15

working papers series