Chicago Workshop on Black-White Inequality



Working Group

December 14, 2007 Workshop

June 21, 2007 Workshop

December 15, 2006 Workshop

April 21, 2006 Workshop



The New Promised Land: Black-White Convergence in the American South, 1940-2000
Jacob L. Vigdor
The black-white earnings gap has historically been larger in the South than in other regions of the United States. This paper shows that this regional gap has closed over time, and in fact reversed during the last decades of the twentieth century. Three proposed explanations for this trend focus on changing patterns of selective migration, labor market trends including reduced discrimination and the decline of manufacturing employment, and lower levels of school segregation and school resource disparities in the modern South relative to the North. Evidence suggests that reductions in Southern labor market discrimination explain rapid regional convergence in racial wage gaps between 1960 and 1980. The more recent decline and reversal of the regional difference appears to be related to narrower disparities in school quality and lower segregation levels in the South. Controlling for region of birth and region of residence, young adult blacks and whites who were educated in the South have the narrowest disparities in earnings and other socioeconomic outcomes.

Measuring the Impact of Crack Cocaine
Roland G. Fryer, Jr., Paul S. Heaton, Steaven D. Levitt, Kevin M. Murphy
A wide range of social indicators turned sharply negative for Blacks in the late 1980s and began to rebound roughly a decade later. We explore whether the rise and fall of crack cocaine can explain these patterns. Absent a direct measure of crack cocaine's prevalence, we construct an index based on a range of indirect proxies (cocaine arrests, cocaine-related emergency room visits, cocaine induced drug deaths, crack mentions in newspapers, and DEA drug busts). The crack index we construct reproduces many of the spatial and temporal patterns described in ethnographic and popular accounts of the crack epidemic. We find that our measure of crack can explain much of the rise in Black youth homicides, as well as more moderate increases in a wide range of adverse birth outcomes for Blacks in the 1980s. Although our crack index remains high through the 1990s, the deleterious social impact of crack fades. One interpretation of this result is that changes over time in behavior, crack markets, and the crack using population mitigated the damaging impacts of crack. Our analysis suggests that the greatest social costs of crack have been associated with the prohibition-related violence, rather than drug use per se.

The Economic Aftermath of the 1960's Riots: Evidence from Property Values
William J. Collins, Robert A. Margo
In the 1960s numerous cities in the United States experienced violent, race-related civil disturbances. Although social scientists have long studied the causes of the riots, the consequences have received much less attention. This paper examines census data from 1950 to 1980 to measure the riots' impact on the value of central-city residential property, and especially on black-owned property. Both ordinary least squares and two-stage least squares estimates indicate that the riots depressed the median value of black-owned property between 1960 and 1970, with little or no rebound in the 1970s. Analysis of household-level data suggests that the racial gap in the value of property widened in riot-afflicted cities during the 1970s.

The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior
James J. Heckman
This paper establishes that a low dimensional vector of cognitive and noncognitive skills explains a variety of labor market and behavioral outcomes. For many dimensions of social performance cognitive and noncognitive skills are equally important. Our analysis addresses the problems of measurement error, imperfect proxies, and reverse causality that plague conventional studies of cognitive and noncognitive skills that regress earnings (and other outcomes) on proxies for skills. Noncognitive skills strongly influence schooling decisions, but do not affect wages given schooling decisions. Schooling, employment and choice of occupation are affected by both noncognitive and cognitive skills. We study a variety of correlated risky behaviors such as teenage pregnancy and marriage, smoking, marijuana use, and participation in illegal activities. The same low dimensional vector of abilities that explains schooling choices, wages, employment and choice of occupation explains a large number of behavioral outcomes.

The Impact of Family Income on Child Achievement
Gordon Dahl, Lance Lochner
Understanding the consequences of growing up poor for a child's well-being is an important research question, but one that is difficult to answer due to the potential endogeneity of family income. Past estimates of the effect of family income on child development have often been plagued by omitted variable bias and measurement error. In this paper, we use a fixed effect instrumental variables strategy to estimate the causal effect of income on children's math and reading achievement. Our primary source of identification comes from the large, non-linear changes in the Earned Income Tax Credit (EITC) over the last two decades. The largest of these changes increased family income by as much as 20%, or approximately $2,100. Using a panel of over 6,000 children matched to their mothers from National Longitudinal Survey of Youth datasets allows us to address problems associated with unobserved heterogeneity and endogenous transitory income shocks as well as measurement error in income. Our baseline estimates imply that a $1,000 increase in income raises math test scores by 2.1% and reading test scores by 3.6% of a standard deviation. The results are even stronger when looking at children from disadvantaged families who are affected most by the large changes in the EITC, and are robust to a variety of alternative specifications.