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  5. Racial Labor Market Disparities: Automation, Entrepreneurship, Non-Standard Work, and the Pandemic Employment Crisis
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Racial Labor Market Disparities: Automation, Entrepreneurship, Non-Standard Work, and the Pandemic Employment Crisis

Paper Session

Saturday, Jan. 8, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: Labor and Employment Relations Association
  • Chair: Dania V. Francis, University of Massachusetts-Amherst

Racial Disparities in Essential Workers' Experiences of the COVID-19 Crisis

Elizabeth O. Ananat
,
Columbia University
Anna Gassman-Pines
,
Duke University

Abstract

The outbreak of the novel coronavirus has profoundly affected many American families, but not everyone has experienced the same effects. Essential workers, unable to earn a paycheck while staying home, have been at the frontlines of both economic and disease risk. These workers are disproportionately likely to be BIPOC and women, but differences between the experiences of essential workers during the pandemic by race and gender are not yet well-understood. Our study has surveyed a representative sample of hourly service workers with a young child--the majority of whom are women of color--in a large U.S. city that has had a typical progression of the pandemic. Data used in this paper were gathered from surveys from a sample of over 1000 respondents surveyed daily for periods before the pandemic (Fall 2019), at the beginning of the pandemic (Spring 2020), and in the midst of the pandemic (Fall 2020). Daily surveys asked about parent work experiences and parent and child well-being every day for two weeks. In addition, respondents completed several one-off surveys (in March/April 2020, June/July 2020, Sept./Oct. 2020, Nov./Dec. 2020, and March/April 2021) that asked about crisis-related hardship, including household job and income loss, increased caregiving burden, material hardship, mental and physical health, and support from both ad-hoc and conventional safety net programs. Preliminary results suggest significant racial disparities on many dimensions of pandemic experiences, with implications for how labor policy can better support diverse essential workers going forward.

When Opportunity Doesn't Knock: The Relationship between Labor Market Opportunity and Necessity Entrepreneurship among Black Workers

Rachel M.B. Atkins
,
New York University

Abstract

Literature on opportunity vs. necessity entrepreneurship debates the extent to which these categories should be considered dichotomous constructs. Fairlie and Fossen (2019) design a measure in which unemployed workers who subsequently report being self-employed are classified as necessity entrepreneurs and all others as opportunity entrepreneurs. Their construct operationalizes and builds upon the push-pull theoretical framework which posits that weak labor markets push workers into entrepreneurship while strong demand and abundant supply of financial capital pull workers into entrepreneurship. Given that black workers face higher levels of unemployment, these theories would predict higher levels of necessity entrepreneurship among this group. However, substantial empirical evidence documents wide Black-White gaps in entrepreneurship.

In this study, I examine whether Black-White gaps in entrepreneurship reflect the net effect of racial differences in opportunity vs necessity entrepreneurship. Using data from the Panel Study of Income dynamics, I begin with Fairlie and Fossen’s measure of opportunity and necessity entrepreneurship by looking at gaps in self-employment rates among black and white workers who were previously unemployed or employed by someone else. I then extend their construct--. I examine whether length of unemployment increases the likelihood of entering self-employment to assess whether unemployment duration is a better measure of labor demand than the dichotomous unemployment measure. Next, I examine whether the change in local unemployment rates, measured separately for black and white residents, change the likelihood of self-employment.

Finally, I examine whether earnings from necessity entrepreneurship are comparable to labor market earnings and if earnings differences are the same across racial groups. This analysis will help policymakers and researchers identify the conditions in which rising entrepreneurship among disadvantaged communities produces positive outcomes worth promoting and the conditions under which rising entrepreneurship may be a sign of troubling underlying economic realities for black workers.

Black Women, Black Men, and Occupational Crowding in Non-Standard Arrangements

Ofronama Biu
,
New School for Social Research

Abstract

Alternative and contingent employment arrangements offer fewer protections, pay, and benefits. Occupational crowding measures the degree to which a group is over-, under-, or proportionally represented in an occupation, taking educational requirements and the group's qualifications into account (Hamilton, 2006). Black workers have been systematically crowded into low wage occupations. This work examines whether Black workers are also overrepresented in non-standard work. This research expands on the crowding literature by comparing Black women, Black men, and White women to White men, the group with the most labor market advantage (King 1993). My analysis finds Black women and Black men are crowded into contingent work and some of the worst alternative arrangements (e.g. temp agency work) while White men are crowded into more desirable forms of work, such as contract arrangements.

Automation, Urban Wage Differentials, and Race

Marcus Casey
,
University of Illinois-Chicago

Abstract

Evidence suggests there have been differential changes in the size of the urban wage premium, where individuals with lower education levels generally do not enjoy as large of a benefit from being in urban areas as their counterparts with higher education. This paper studies how this change in the urban wage differential varies within and across racial groups and occupation type. Then, using information on automation penetration across MSAs, I explore how these gaps interact with labor market changes induced to adoption of automation and other types of information technology.

Discussant(s)
Patrick Bayer
,
Duke University
Bryan Stuart
,
Federal Reserve Bank of Philadelphia
JEL Classifications
  • J1 - Demographic Economics
  • J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining