Andreas Ferrara (U. of Warwick)
14 January 2019 @ 16:00 - 17:30
This paper argues that the unprecedented socioeconomic rise of African Americans at mid-century was causally related to the labor shortages induced by WWII. Combining novel military and Census data in a difference-in-differences setting, results show that counties with an average casualty rate among semi-skilled whites experienced a 13 to 16% increase in the share of blacks in semi-skilled jobs. The casualty rate also had a positive reduced form effect on wages, home ownership, house values, and education for blacks. Using Southern survey data, IV regression results indicate that individuals in affected counties had more interracial friendships and reduced preferences for segregation in 1961. This is an example for how better labor market opportunities can improve both economic and social outcomes of a disadvantaged minority group.