Workplace Segregation in the United States: Race, Ethnicity, and Skill

We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and ­ since skill is often correlated with race and ethnicity ­ we assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity. We define segregation based on the extent to which workers are more or less likely to be in workplaces with members of the same group, and we measure segregation as the observed percentage relative to maximum segregation. Our results indicate that there is considerable segregation by education and language in the workplace. Among whites, for example, observed segregation by education is 17% (of the maximum), and for Hispanics, observed segregation by language ability is 29 percent. Racial (black-white) segregation in the workplace is of a similar magnitude to education segregation (14%), and ethnic (Hispanic-white) segregation is somewhat higher (20%). Only a tiny portion (3%) of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace (32 percent) can be attributed to differences in language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same languageSegregation; Language; Skill; Race; Ethnicity

Workplace Segregation in the United States: Race, Ethnicity, and Skill

We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language%u2013as skilled workers may be more complementary with other skilled workers than with unskilled workers%u2013and by race and ethnicity, using simulation methods to measure segregation beyond what would occur randomly as workers are distributed across establishments. We also assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity, as skill is often correlated with race and ethnicity. Finally, we attempt to distinguish between segregation by skill based on general crowding of unskilled poor English speakers into a narrow set of jobs, and segregation based on common language for reasons such as complementarity among workers speaking the same language. Our results indicate that there is considerable segregation by education and language in the workplace. Racial segregation in the workplace is of the same order of magnitude as education segregation, and segregation between Hispanics and whites is larger yet. Only a tiny portion of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace can be attributed to differences in language proficiency.

Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set

In this paper, we first describe the 1990 DEED, the most recently constructed matched employer-employee data set for the United States that contains detailed demographic information on workers (most notably, information on education). We then use the data from manufacturing establishments in the 1990 DEED to update and expand on previous findings, using a more limited data set, regarding the measurement of the labor input and theories of wage determination. We find that the productivity of women is less than that of men, but not by enough to fully explain the gap in wages, a result that is consistent with wage discrimination against women. In contrast, we find no evidence of wage discrimination against blacks. We estimate that both the wage and productivity profiles are rising but concave to the origin (consistent with profiles quadratic in age), but the estimated relative wage profile is steeper than the relative productivity profile, consistent with models of deferred wages. We find a productivity premium for marriage equal to that of the wage premium, and a productivity premium for education that somewhat exceeds the wage premium. Exploring the sensitivity of these results, we also find that different specifications of production functions do not have any qualitative effects on the these results. Finally, the results indicate that the returns to productive inputs (capital, materials, labor quality) as well as the residual variance are virtually unaffected by the choice of the construction of the labor quality input.

Ethnicity, Language, and Workplace Segregation: Evidence from a New Matched Employer-Employee Data Set

We describe the construction and assessment of a new matched employer-employee data set (the Decennial Employer-Employee Dataset, or DEED) that we have undertaken as a part of a broad research agenda to study segregation in the U.S. labor market. In this paper we examine the role of segregation by Hispanic ethnicity and language proficiency, contributing new, previously unavailable descriptive information on segregation along these lines, and evidence on the wage premia or penalties associated with this segregation. The DEED is much larger and more representative across regional and industry dimensions than previous matched data sets for the United States, and improvements along both of these dimensions are essential to isolating the importance of segregation by language and ethnicity in the workplace. Our empirical results reveal considerable segregation by Hispanic ethnicity and by English language proficiency. We find that Hispanic workers, but not white workers, suffer wage penalties from employment in a workplace with a large share of Hispanic workers, and even more so a large share of Hispanic workers with poor English language proficiency. In addition, we find that segregation of Hispanic workers among other Hispanics with similar English language proficiency does not reduce the penalties associated with poor own language skills.

Changes in Workplace Segregation in the United States between 1990 and 2000: Evidence from Matched Employer-Employee Data

We present evidence on changes in workplace segregation by education, race, ethnicity, and sex, from 1990 to 2000. The evidence indicates that racial and ethnic segregation at the workplace level remained quite pervasive in 2000. At the same time, there was fairly substantial segregation by skill, as measured by education. Putting together the 1990 and 2000 data, we find no evidence of declines in workplace segregation by race and ethnicity; indeed, black-white segregation increased. Over this decade, segregation by education also increased. In contrast, workplace segregation by sex fell over the decade, and would have fallen by more had the services industry - a heavily female industry in which sex segregation is relatively high - not experienced rapid employment growth.

Spatial Mismatch or Racial Mismatch?

We contrast the spatial mismatch hypothesis with what we term the racial mismatch hypothesis – that the problem is not a lack of jobs, per se, where blacks live, but a lack of jobs where blacks live into which blacks are hired. We first report new evidence on the spatial mismatch hypothesis, using data from Census Long-Form respondents. We construct direct measures of the presence of jobs in detailed geographic areas, and find that these job density measures are related to employment of black male residents in ways that would be predicted by the spatial mismatch hypothesis – in particular that spatial mismatch is primarily an issue for low-skilled black male workers. We then look at mismatch along not only spatial lines but racial lines as well, by estimating the effects of job density measures that are disaggregated by race. We find that it is primarily black job density that influences black male employment, whereas white job density has little if any influence on their employment. The evidence implies that space alone plays a relatively minor role in low black male employment rates.