Why Racial Employment Inequality Is Greater in Northern Labor Markets: Regional Differences in White-Black Employment Differentials

Abstract

This article investigates employment inequality between 25–59-year-old white and black men in U.S. metropolitan areas in 1980. Greater inequality in employment is observed in the Northeast and Midwest than in the South and West. Regression analysis shows that area variation in employment inequality is closely associated with variation in unionization strength, presence of large firms, and labor demand and that it is moderately associated with variation in race differences in age structure and education and the presence of traditionally black occupations. Regional patterns indicate that the substantially lower employment inequality in the South and West can be attributed to the more robust economies, smaller average firm size, and lower levels of unionization in the metropolitan areas in these regions. These regional differences are large and serve to offset the impact of large racial gaps in educational attainment in the South that often contribute to inequality in employment.