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Racial Discrimination

Paper Session

Friday, Jan. 5, 2024 8:00 AM - 10:00 AM (CST)

Grand Hyatt, Republic B
Hosted By: American Economic Association
  • Chair: Kevin Lang, Boston University

Racial Representation, Segregation, and Sorting

Jiangnan Zeng
,
University of Pittsburgh

Abstract

This paper investigates the impact of racial representation in local government on individual migration decisions, public goods provision, and residential segregation. I have constructed a novel migration dataset that allows me to track individual migration patterns within and across cities based on North Carolina voter registration records. Utilizing data from closely contested mayoral elections and this migration dataset, I establish causal links between the presence of a Black mayor and individual location decisions. The analysis reveals that having a Black mayor leads to a 4% net increase in the population of majority-Black neighborhoods and a 2% rise in white neighborhoods. These findings are corroborated by tract-level data from 120 major U.S. cities. Using the information I construct on individual migration decisions, I am able to further demonstrate that these net population changes are the result of the reduced out-migration of both Black and white residents and a modest increase in movers from outside the city. The net effect of these changes is an increase in racial segregation arising from the increased concentration of Black individuals in majority-Black neighborhoods. Further analysis into the underlying mechanisms shows that Black representation narrows the amenities disparity between majority-Black and white neighborhoods and shifts local media focus towards Black neighborhoods.

The Unintended Effect of Decreasing State Support for Higher Education on Student Diversity

Dora T. Gicheva
,
University of North Carolina-Greensboro

Abstract

This paper examines how changes in state funding for higher education impact the share of minority students at public postsecondary institutions in the U.S. To isolate a causal relationship between state funding and minority student representation, I use a shift-share instrumental variable approach that combines variations in state-level funding with each institution's baseline level of reliance on state appropriations. The results suggest that state appropriation cuts decrease the diversity of incoming students; Hispanic student enrollment is particularly sensitive to funding levels. This trend is most pronounced at less selective four-year institutions. One potential mechanism driving this relationship is an increase in students' cost of attendance: I show that posted tuition and fees are higher, the share of students receiving state grant aid is lower, and more students borrow when states cut funding for higher education.

The Geography of Disadvantage: Implications for Poverty Assessment and Program Targeting

Bruce D. Meyer
,
University of Chicago
Derek Wu
,
University of Virginia
Brian Curran
,
University of Chicago

Abstract

Individuals are often thought to be more disadvantaged in higher-cost areas. As a result, geographic adjustments for local prices are embedded in many federal payments to states, localities, and individuals and have been proposed or implemented for various poverty measures. This paper proposes a rigorous approach to assess the desirability of geographic adjustments to poverty measures by examining how well they achieve a central objective of a poverty measure: identifying the least advantaged population. Specifically, we compare an exhaustive list of material well-being indicators of those classified as poor under the Supplemental Poverty Measure and the new Comprehensive Income Poverty Measure with and without a geographic adjustment. These well-being indicators are drawn from linked survey and administrative records and include material hardships, appliances owned, home quality issues, food security, public services, health, education, assets, permanent income, and mortality. For nine of the ten domains of well-being indicators, we find that incorporating a geographic adjustment identifies a less deprived poor population. This result can be explained by local prices being positively correlated with public goods and locational amenities, which are valued by those with low incomes.

Unemployment Risk, Portfolio Choice, and the Racial Wealth Gap

Chi Hyun Kim
,
University of Bonn
Ellora Derenoncourt
,
Princeton University
Moritz Kuhn
,
University of Bonn
Moritz Schularick
,
University of Bonn

Abstract

Black Americans are exposed to strong cyclical unemployment risk that correlates with stock market returns. Under high exposure to cyclical unemployment risk, it is optimal for individuals to invest less in risky assets and minimize overall risk exposure over their life cycle. Our study shows that cyclical unemployment risk explains a substantial amount of the equity gap across Black and white Americans during 1980-2020: 20% of the stock market participation gap and 50% of the gap in Black and white equity shares in portfolios. Given continuously rising equity returns, such frictions in the labor market will further perpetuate racial wealth inequality in the US.

The Legacy of Lynchings and State-Sanctioned Violence Against Black Americans

Jhacova Williams
,
American University

Abstract

We analyze the extent to which race-specific police-related fatalities are linked to historical lynchings that took place from 1851 to 1930. We show that Black, White, and other racial minorities who reside in counties that experienced a higher number of historical lynchings also face higher levels of police violence today. This relationship holds after accounting for a variety of historical and contemporary characteristics of counties, including arrest rates and homicides. Our results are strongest for Black individuals, which provides evidence of continued violence perpetrated against Black individuals that date back over 140 years. Additionally, we find that not only are Black lynchings related to contemporary police-related fatalities of Black individuals but White lynchings and the lynchings of other racial minorities are linked to police killings of Black individuals today. These results suggest that there has never been a moment in which Black people have been the primary target of state-sanctioned violence in the United States.
JEL Classifications
  • J7 - Labor Discrimination