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  3. 2026
  4. Program
  5. Session Honoring The Contributions of William Spriggs to Policy, Economics and the Economics Profession: Segregation, Institutions, and Unions
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Session Honoring The Contributions of William Spriggs to Policy, Economics and the Economics Profession: Segregation, Institutions, and Unions

Paper Session

Saturday, Jan. 3, 2026 12:30 PM - 2:15 PM (EST)

Philadelphia Marriott Downtown, Room 409
Hosted By: National Economic Association
  • Chair: Robynn Cox, University of California-Riverside

Does Racial Hierarchy Really Harm Everyone?  Relative Status Envy and the Economics of Reparative Reforms

David McMillon
,
Emory University

Abstract

This paper contributes to Stratification Economics by examining the conditions under which reparative race-focused reforms improve macroeconomic output, material conditions (consumption), and social welfare. While recent high-profile studies claim that equitable reforms would boost GDP, many rely on static accounting, ignoring behavioral feedbacks and relative intergroup status envy. I develop a dynamic representative agent model in which groups derive utility from relative status, face wage and human capital distortions, and choose endogenous effort. A planner uses proportional taxation to finance reforms for the disadvantaged group, rebating revenues as transfers. I derive conditions for reforms to generate (i) increased aggregate output, (ii) Pareto consumption gains, and (iii) Pareto welfare gains, given status-envy parameter γ. Using a literature-based calibration, most of the policy space enhances GDP and consumption for both groups. Fewer policies even generate Pareto Welfare gains despite significant status envy-suggesting equity, productive efficiency, and political feasibility can coexist for appropriately designed reparative reforms. The optimal policy raises GDP by 42% with Pareto-consumption gains. However, it only Pareto-improves Welfare if γ ≤ 0.41-interpretable as a willingness to pay at most $0.41 to block $1.00 of exogenous disadvantaged gains. Beyond a larger threshold, a welfare-maximizing planner rejects the output-maximizing reform, and every percent increase in status envy reduces GDP gains by 0.24%. This illustrates tension between output-based and preference-based efficiency, highlighting how normative definitions shape what it means for an equitable policy to be "efficient" under racial hierarchy.

Hell with the Lid Off: Racial Segregation and Environmental Equity in America’s Most Polluted City

Spencer Banzhaf
,
North Carolina State University
William Mathews
,
University of Pittsburgh
Randall Walsh
,
University of Pittsburgh

Abstract

This study examines the changing relationship between racial segregation and environmental equity in Pittsburgh from 1910 to 1940. Utilizing newly digitized historical data on the spatial distribution of air pollution in what was likely America’s most polluted city, we analyze how racial disparities in exposure to air pollution evolved during this period of heightening segregation. Our findings reveal that black residents experienced significantly higher levels of pollution compared to their white counterparts and that this disparity increased over time. We identify within-city moves as a critical factor exacerbating this inequity, with black movers facing increased pollution exposure. In contrast, European immigrants, who were also initially exposed to relatively high levels of pollution, experienced declining exposure as they assimilated over this time period. We also provide evidence of the capitalization of air pollution into housing markets. Taken as a whole, our results underscore the importance of considering environmental factors in discussions of racial and economic inequalities.

What Do (Thousands of) Unions Do? Union-Specific Pay Premia and Inequality

Ellora Derenoncourt
,
Princeton University
François Gerard
,
University College London
Lorenzo Lagos
,
Brown University
Claire Montialoux
,
Sciences Po

Abstract

We study the role of union heterogeneity in shaping wage inequality among union-ized workers. Using linked employer-employee data from Brazil and job moves across multi-firm unions, we estimate over 4,800 union-specific pay premiums. We find that unions explain 3–4% of earnings variation. While unions raise wages on average, this effect conceals substantial heterogeneity. Underscoring the importance of heterogeneity, wages fall in markets with high-premium unions following a nationwide right-to-work law. Linking premiums to detailed union attributes, we find that unions with strikes, collective bargaining agreements, internal competition, and skilled leaders se-cure higher wages. Heterogeneity also matters for between-group inequality: on average, unions slightly widen wage gaps by education, but high-premium unions tend to compress them. Workers support high-premium unions, but only when between-group bargaining differentials are small. Our findings show that unions are not a monolith—their structure and actions shape their wage effects and, consequently, worker support.

Do Unions Decrease Earnings Inequality?

Phanindra V. Wunnava
,
Middlebury College
Austin Gill
,
Analysis Group

Abstract

One of the notable economic trends since the late 1980’s is a dramatic rise in earnings
inequality. Several researchers concluded that a significant source of earnings inequality is due to
a large decrease in the unionized fraction of the labor force. The main focus of this paper is to
investigate impact of union density, unemployment, and demographic characteristics on income
inequality (i.e., Gini index). Preliminary results, based on a panel of Metropolitan Statistical Areas
in the United States between 2010 and 2021, indicate that the union membership rate has a
countering effect on growing income inequality. Demographic controls also seem to affect income
inequality. By disaggregating union density, we find the magnitude of its effect on income
inequality is larger in the private sector relative to the public sector. The overall effect of union
density on Gini is driven by the private sector due to its larger share of employment. Accordingly,
the recent upswing in private sector union drives with the backdrop of a tight labor market may
have an important role to play in reducing inequality in the coming years.

Discussant(s)
Omari Swinton
,
Howard University
Jesse Rothstein
,
University of California-Berkeley
Illenin Kondo
,
Federal Reserve Bank of Minneapolis
Ellora Derenoncourt
,
Princeton University
JEL Classifications
  • J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining
  • J3 - Wages, Compensation, and Labor Costs