Why Did so Many African-American Men Lose Their Jobs in the 1980s? An Analysis of Black/White Differences in Job Displacement

Using data from the 1984 to 1992 Displaced Worker Surveys, we find that black men fared much worse than white men at every stage of job displacement. For the period 1982 to 1991, black men experienced rates of job displacement that were 30 percent higher, reemployment rates that were 30 percent lower, and average earnings losses conditional on reemployment that were 3.4 percentage points larger than the average for white men. We identify the underlying causes of racial differences in each of these stages. We find that differences in occupations, educational attainment, industries, previous job tenure, and region play varying roles in explaining racial differences in job displacement and its outcomes. We estimate that racial differences in occupation and educational attainment explain from 12 to 32 percent and from 26 to 35 percent of the displacement gap, respectively, and that racial differences in industry cannot explain any part of the displacement gap. We find that racial differences in occupation and educational attainment explain from 8 to 10 percent and from 9 to 26 percent of the gap in the reemployment rate, respectively. Blacks had favorable regional and industry distributions that narrowed the gap between their reemployment rate and the white reemployment rate. Our estimates show that higher levels of job tenure and higher probabilities of living in the central city among reemployed black men contribute to the racial gap in log earnings changes, whereas the somewhat favorable regional and industry distributions of blacks relative to whites reduce the gap