Can Boosting Minority Car-Ownership Rates Narrow Inter-Racial Employment Gaps?

Abstract

In this paper, we assess whether boosting minority car-ownership rates would narrow inter-racial employment rate differentials. We pursue two empirical strategies. First, we explore whether the effect of auto ownership on the probability of being employed is greater for more segregated groups of workers. Exploiting the fact that African-Americans are considerably more segregated from whites than are Latinos, we estimate car-employment effects for blacks, Latinos, and whites and test whether these effects are largest for more segregated groups. Second, we use data at the level of the metropolitan area to test whether the car-employment effect for blacks relative to that for whites increases with the degree of black relative isolation from employment opportunities. We find the strongest car effects for blacks, followed by Latinos, and then whites. Moreover, this ordering is statistically significant. We also find that the relative car-employment effect for blacks is largest in metropolitan areas where the relative isolation of blacks from employment opportunities is the most severe. Our empirical estimates indicate that raising minority car-ownership rates to the white car ownership rate would eliminate 45 percent of the black-white employment rate differential and 17 percent of the comparable Latinbo-white differential.