The Economic Progress of African Americans in Urban Areas: A Tale of 14 Cities

By Black, Dan A.; Kolesnikova, Natalia A. et al. | Federal Reserve Bank of St. Louis Review, September-October 2010 | Go to article overview

The Economic Progress of African Americans in Urban Areas: A Tale of 14 Cities


Black, Dan A., Kolesnikova, Natalia A., Taylor, Lowell J., Federal Reserve Bank of St. Louis Review


How significant was the economic progress of African Americans in the United States between 1970 and 2000? In this paper the authors examine this issue for black men 25 to 55 years of age who live in 14 large U.S. metropolitan areas. They present evidence that significant racial disparities remain in education and labor market outcomes of black and white men, and they discuss changes in industrial composition, migration, and demography that might have contributed to the stagnation of economic progress of black men between 1970 and 2000. In addition, the authors show that there was no progress in the financial well-being of black children, relative to white children, between 1970 and 2000. (JEL J15, J31, J71, R23)

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How significant was the economic progress of African Americans in the United States between 1970 and 2000? The common perception is that inequality between races has decreased. In 1954, the Supreme Court's decision in the famous Brown v. Board of Education case proclaimed racial segregation of public schools unconstitutional. It paved the way for the Civil Rights Act of 1964, which outlawed racial segregation in schools and the workplace, among other provisions. By making racial discrimination illegal, the Act opened doors to better education, including higher education, and offered greater employment opportunities to African Americans.

This progress is undeniable, but questions remain: Did these societal changes translate into economic changes as well? Did earnings of blacks increase relative to earnings of whites? Did labor force attachment of blacks become more secure? How much did educational attainment and skill acquisition improve? Did the economic well-being of black children improve?

Most of the previous research on these topics was done on a national level. (1) Such studies, at most, "control for" the geographic region (South, Northeast, Midwest, etc.) and/or whether a person resides in an urban/rural area. This paper, however, examines and compares various aspects of African-American progress in labor markets between 1970 and 2000 across large U.S. cities. Analysis on a city rather than national level addresses two issues: First, cities in the United States vary widely in their characteristics, including labor market conditions and industrial structure. Second, and more importantly, the history of the black population varies among the different regions of the country. These differences warrant a separate look at each city--Memphis and Detroit, for instance--to distinguish between them and thus better analyze changes in individual economic conditions of blacks.

Finally, a recent study by Black et al. (2009) demonstrates that it is important to take into consideration geographic location when studying racial differences. Performing analysis on a national level masks underlying trends in local labor markets. (2) The study shows, in particular, that a failure to account for city-specific differences in black-white wage gaps results in a significant (about 50 percent) overestimation of black-white wage-gap conversion. In many local labor markets, especially high-productivity, high-wage markets, the black-white wage gap essentially stayed the same over the years. But as more and more black men moved into high-wage cities, the national black-white wage gap has decreased dramatically even though there was little change in each particular market. The reason for the seeming black-white wage convergence was not only a change in labor markets but simply a redistribution of black population from low-wage to high-wage markets--something that would not be apparent if looking only at national averages.

It seems reasonable, therefore, to document economic progress of African Americans in the context of a specific labor market and then compare the progress across cities. Performing such analysis is the goal of this paper. (3)

DATA DESCRIPTION

In particular, we study African-American progress in 14 metropolitan statistical areas (MSAs; as defined by the Census Bureau (4)) from 1970 to 2000. …

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