Why do small establishments hire fewer blacks than large ones

This paper shows that small establishments are much less likely to hire and employ blacks than are larger establishments. A number of possible explanations for this result are considered, such as differences across establishments in application rates from blacks, skill needs, locations, and recruiting behavior. Although these factors can account for some of the differences between small and large employers, much remains unexplained. The results suggest that discrimination in hiring may be much more pervasive at smaller establishments than larger ones.

Employer Demand, AFDC Recipients, and Labor Market Policy

This paper discusses the potential labor market prospects of AFDC recipients who will be required to work under the new welfare legislation. Various characteristics of available low-skill jobs are compared with those of long-term AFDC recipients, and more general evidence on the labor market experiences of welfare recipients is reviewed. From these data, the potential availability of employment and wage levels that recipients will face in the labor market is inferred. The data suggest that job availability for long-term recipients will be quite limited, especially in the short run; many will likely be plagued by lengthy durations of nonemployment, as well as high job turnover and low wages and benefits when they do work. The implications of these findings for labor market policy are then discussed.

Employer Demand for Welfare Recipients and the Business Cycle: Evidence from Recent Employer Surveys

In this paper I present evidence on the extent to which labor market tightness, as measured by job vacancy rates and other indicators of hiring difficulty, affect the willingness of establishments to hire welfare recipients. From these estimates, I infer the effects of the business cycle on the labor market demand for welfare recipients. The data are from a new survey of employers in Michigan. The results indicate that labor market tightness has a substantial effect on employer demand for welfare recipients. They also suggest that employer willingness to provide workplace amenities or supports to welfare recipients (such as child care, transportation assistance, training, etc.), along with their receptiveness to policy interventions on behalf of recipients, is influenced by labor market tightness as well.

Employer hiring decisions and antidiscrimination policy

Have federal antidiscrimination policies been effective in improving employment outcomes for minorities and females? If so, why have the relative wages and employment of blacks deteriorated in recent years? What other factors on the demand side of the labor market have contributed to these developments, and what are the appropriate public policy responses? In this paper I address these issues. I begin by reviewing evidence in the literature on the recent employment problems of minorities and on hiring discrimination. I specifically consider the effectiveness of Equal Employment Opportunity laws and Affirmative Action programs in improving employment outcomes for minorities as well as females. I then provide new evidence from a recent survey of over 3000 employers on the determinants of hiring. I focus on employer skill needs and hiring procedures, as well as the racial mix of the firm's applicants and customers, in determining employment outcomes for minorities and females. Employer use of Affirmative Action in recruiting and hiring is considered as well. Finally, I consider the implications of these findings for the usefulness of antidiscrimination policies and other approaches for improving employment outcomes for less-skilled minorities.

What Does Affirmative Action Do?

We use data from a survey of employers to investigate how Affirmative Action in recruiting and hiring influences hiring practices, personnel policies, and ultimately employment out- comes. Our results show that Affirmative Action increases the number of recruitment and screening practices used by employers, raises their willingness to hire stigmatized applicants, increases the number of minority and female applicants as well as employees, and increases employers’ tendencies to provide training and to formally evaluate employees. When Affirmative Action is used in recruiting, it does not lead to lower credentials or performance of women and minorities hired. When it is also used in hiring, it yields female and minority employees whose credentials are somewhat weaker, though performance generally is not. Overall, then, the more intensive search, evaluation, and training that accompany Affirmative Action appear to offset any tendencies of the policy to lead to hiring of less-qualified or less-productive women and minorities.

Job Change and Job Stability among Less-Skilled Young Workers

In this paper we review evidence from previous studies of job and employment instability among less-educated young workers, and we provide new evidence from the National Longitudinal Survey of Youth. We find that early employment instability contributes somewhat to the low levels of employment observed among high school dropouts, especially females. Important determinants of job stability include the cognitive skills of the workers themselves (as measured by math test scores), current or previous experience and job tenure, and a variety of job characteristics including starting wages, occupation, and industry. Job instability among female dropouts seems to be strongly related to fertility history and marital status. Some implications for policy, especially welfare reform, are discussed as well.

Employer Demand for Welfare Recipients by Race

This paper uses new survey data on employers in four large metropolitan areas to examine the determinants of employer demand for welfare recipients. The results suggest a high level of demand for welfare recipients, though such demand appears fairly sensitive to business cycle conditions. A broad range of factors, including skill needs and industry, affect the prospective demand for welfare recipients among employers, while other characteristics that affect the relative supply of welfare recipients to these employers (such as location and employer use of local agencies or welfare-to-work programs) influence the extent to which such demand is realized in actual hiring. Moreover, the conditional demand for black (and to a lesser extent Hispanic) welfare recipients lags behind their representation in the welfare population and seems to be more heavily affected by employers’ location and indicators of preferences than by their skill needs or overall hiring activity. Thus, a variety of factors on the demand side of the labor market continue to limit the employment options of welfare recipients, especially those who are minorities.

Customer Discrimination and Employment Outcomes for Minority Workers

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.

Spatial factors and the employment of blacks at the firm level

In this paper we use data from a new survey of over 3,000 employers in four major metropolitan areas to investigate the determinants of black employment and wages at the firm level. We focus specifically on two factors that are likely to influence the spatial distribution of black employment: the proximity of firms to the residential locations of various racial groups and to public transit. We also consider the effects on black employment of other factors, such as employers' skill needs and some likely determinants of their preferences across groups. Our main finding is that employers' proximity to black residences and to public transit increases the likelihood that they will hire black employees. This is true even when we include detailed controls for the skills needed by employers and also for the race of customers and of those responsible for hiring, which independently affect the levels of black employment at firms. Proximity to public transit and especially to black residences accounts for major portions of the higher black employment rates at central-city than suburban firms. The residential effects are relatively strong for employers who recruit through informal methods and weak for those who use newspapers, thus suggesting that information may play a role in the distance effects. We also find some evidence that employers' proximity to black residential populations results in lower wages for workers.

Are Suburban Firms More Likely to Discriminate Against African Americans?

This paper presents a test of the hypothesis that employers in suburban locations are more likely to discriminate against African Americans than are employers located in central cities. Using a difference-in-difference framework, we compare central-city/suburban differences in racial hiring outcomes for firms where a white person is in charge of hiring (white employers, for short) to similar geographic differences in outcomes for firms where a black person is in charge of hiring (black employers). We find that both suburban black and white employers hire fewer blacks than their central-city counterparts. Moreover, the central-city/suburban hiring gap among black employers is as large as, or larger than, that of white employers. Suburban black employers, however, receive many more applications from blacks and hire more blacks than do white firms in either location.