The emergence, persistence, and recent widening of the racial unemployment gap

Abstract

Census data show that the ratio of black to white unemployment rates, currently in excess of 2:1, was small or nonexistent before 1940, widened dramatically during the 1940s and 1950s, and widened again in the 1980s. The authors decompose changes in the unemployment gap over the years 1880-1990 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 1950s can be attributed to regional shifts of workers and declining demand in markets where black workers were concentrated. After 1970, improvements in the relative educational status of black workers would have narrowed the unemployment gap slightly, but demand shifts adverse to black workers more than canceled out these gains.