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Why Are Black Employers More Likely to Hire African Americans than White Employers?

Author

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  • Michael A. Stoll
  • Steven Raphael
  • Harry J. Holzer
Abstract
A consistent observation is that black employers tend to hire African Americans at greater rates than their white counterparts. This paper examines the reasons for this pattern using data from the 1992-94 Multi-City Employer Survey, which is a representative sample of firms in Atlanta, Boston, Detroit and Los Angeles. We use standard regression techniques and decomposition analysis and find that black employers are more likely to hire African Americans because they receive applications from blacks, and hire them out of the black applicant pool, at greater rates than white employers. Thus, to the extent that there is concern over the persistent unemployment difficulties of African Americans, having more blacks in positions with hiring authority within firms would help to alleviate this problem.

Suggested Citation

  • Michael A. Stoll & Steven Raphael & Harry J. Holzer, 2001. "Why Are Black Employers More Likely to Hire African Americans than White Employers?," JCPR Working Papers 228, Northwestern University/University of Chicago Joint Center for Poverty Research.
    • Handle: RePEc:wop:jopovw:228
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    References listed on IDEAS

    as
    1. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination and Employment Outcomes for Minority Workers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 835-867.
    2. William J. Carrington & Kristin McCue & Brooks Pierce, 2000. "Using Establishment Size to Measure the Impact of Title VII and Affirmative Action," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 503-523.
    3. Steven Raphael & Michael A. Stoll, 2000. "Can Boosting Minority Car-Ownership Rates Narrow Inter-Racial Employment Gaps," JCPR Working Papers 200, Northwestern University/University of Chicago Joint Center for Poverty Research.
    4. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, June.
    5. Michael A. Stoll & Harry J. Holzer & Keith R. Ihlanfeldt, 2000. "Within cities and suburbs: Racial residential concentration and the spatial distribution of employment opportunities across sub-metropolitan areas," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 207-231.
    6. Harry J. Holzer, 1998. "Why Do Small Establishments Hire Fewer Blacks Than Large Ones?," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 896-914.
    7. Holzer, Harry J. & Reaser, Jess, 2000. "Black Applicants, Black Employees, and Urban Labor Market Policy," Journal of Urban Economics, Elsevier, vol. 48(3), pages 365-387, November.
    8. Stoll, Michael A., 1999. "Spatial Job Search, Spatial Mismatch, and the Employment and Wages of Racial and Ethnic Groups in Los Angeles," Journal of Urban Economics, Elsevier, vol. 46(1), pages 129-155, July.
    9. Holzer Harry J. & Ihlanfeldt Keith R. & Sjoquist David L., 1994. "Work, Search, and Travel among White and Black Youth," Journal of Urban Economics, Elsevier, vol. 35(3), pages 320-345, May.
    10. Harry J. Holzer & David Neumark, 2000. "What Does Affirmative Action Do?," ILR Review, Cornell University, ILR School, vol. 53(2), pages 240-271, January.
    11. Marc Bendick & Charles Jackson & Victor Reinoso, 1994. "Measuring employment discrimination through controlled experiments," The Review of Black Political Economy, Springer;National Economic Association, vol. 23(1), pages 25-48, June.
    12. Raphael, Steven, 1998. "The Spatial Mismatch Hypothesis and Black Youth Joblessness: Evidence from the San Francisco Bay Area," Journal of Urban Economics, Elsevier, vol. 43(1), pages 79-111, January.
    13. Harry J. Holzer & Keith R. Ihlanfeldt, 1996. "Spatial factors and the employment of blacks at the firm level," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 65-86.
    14. Raphael, Steven & Stoll, Michael, 2000. "Can Boosting Minority Car-Ownership Rates Narrow Inter-Racial Employment Gaps?," University of California Transportation Center, Working Papers qt4fq193gk, University of California Transportation Center.
    15. Timothy Bates, 1994. "Utilization of minority employees in small business: A comparison of nonminority and black-owned urban enterprises," The Review of Black Political Economy, Springer;National Economic Association, vol. 23(1), pages 113-121, June.
    16. Michael A. Stoll & Steven Raphael, 2000. "Racial Differences in Spatial Job Search Patterns: Exploring the Causes and Consequences," Economic Geography, Taylor & Francis Journals, vol. 76(3), pages 201-223, July.
    17. Raphael, Steven & Stoll, Michael A. & Holzer, Harry J., 2000. "Are Suburban Firms More Likely to Discriminate against African-Americans?," Journal of Urban Economics, Elsevier, vol. 48(3), pages 485-508, November.
    18. Daniel Immergluck, 1996. "What employers want: Job prospects for less-educated workers," The Review of Black Political Economy, Springer;National Economic Association, vol. 24(4), pages 135-143, June.
    19. Harry J. Holzer, 1998. "Employer Skill Demands and Labor Market Outcomes of Blacks and Women," ILR Review, Cornell University, ILR School, vol. 52(1), pages 82-98, October.
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    Cited by:

    1. Fairlie, Robert, 2020. "The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions," MPRA Paper 113127, University Library of Munich, Germany.
    2. Robert W. Fairlie & Frank Fossen, 2021. "Did the $660 Billion Paycheck Protection Program and $220 Billion Economic Injury Disaster Loan Program Get Disbursed to Minority Communities in the Early Stages of COVID-19?," NBER Working Papers 28321, National Bureau of Economic Research, Inc.
    3. Robert Fairlie, 2024. "The impacts of COVID‐19 on racial inequality in business earnings," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(1), pages 258-288, January.
    4. Robert Fairlie, 2020. "The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 727-740, October.
    5. Robert Fairlie & Frank M. Fossen, 2022. "Did the Paycheck Protection Program and Economic Injury Disaster Loan Program get disbursed to minority communities in the early stages of COVID-19?," Small Business Economics, Springer, vol. 58(2), pages 829-842, February.

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