Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: This research examines the role of labor market segregation in determining socioeconomic outcomes and socioeconomic inequalities among blacks, Hispanics and whites. Using data from the 1992-1994 Multi-City Study of Urban Inequality (MCSUI), we examine the extent to which the racial or ethnic composition of jobs in one's place of work affects racial and ethnic- linked occupational and earnings inequalities among whites, blacks, and Hispanics. Four types of ethnic labor markets are distinguished according to the ethnic composition of the jobs in the work establishment: predominantly white, multi-ethnic or mixed, predominantly black, and predominantly Hispanic. We find considerable differences among the four labor markets in both their populations' characteristics and socioeconomic outcomes. White labor markets are characterized by the highest earnings, highest status occupations, and highest levels of education. Hispanic labor markets are characterized by the lowest salaries, lowest status occupations, and lowest levels of education. The data analysis provides only partial support for the hypothesis that labor market segregation is responsible for the socioeconomic disparities among groups. Only part of the socioeconomic differences between whites and the minority populations can be attributed to labor market segregation. Specifically, when compared with whites, blacks and Hispanics are disadvantaged in their attainment of occupational status and earnings even when considering the socioeconomic disadvantages associated with segregation patterns across labor markets. The analysis also reveals that the occupational status and earnings of most workers could have increased considerably had they been rewarded like whites employed in the predominantly white labor market. The only group of workers who "benefitted" from segregation are Hispanic workers employed in ethnic labor markets, especially in the Hispanic labor market. In the absence of competition with whites, Hispanics are able to achieve jobs and earnings that they could not attain in the mainstream labor market. Their actual occupations and earnings are substantially higher than expected on basis of their human resources. In contrast, blacks are disadvantaged in their attainment of socioeconomic rewards regardless of the ethnic composition of the labor market. In fact, their socioeconomic disadvantages are more pronounced in ethnic labor markets than outside them. The differential effects of labor market segregation on socioeconomic outcomes of blacks and Hispanics are evaluated and discussed within the framework of the sheltered ethnic-economy theoretical model.