Torn Apart? The Impact of Manufacturing Employment Decline on Black and White Americans

82 Pages Posted: 9 Jul 2018

See all articles by Eric D. Gould

Eric D. Gould

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Abstract

This paper examines the impact of manufacturing employment decline on the socio-economic outcomes within and between black and white Americans from 1960 to 2010. Exploiting variation across cities and over time, the analysis shows that manufacturing decline negatively impacted blacks (men, women, and children) in terms of their wages, employment, marriage rates, house values, poverty rates, death rates, single parenthood, teen motherhood, child poverty, and child mortality. In addition, the decline in manufacturing increased inequality within the black community in terms of overall wages and the gaps between education groups in wages, employment, and marriage rates.Many of the same patterns are found for whites, but to a lesser degree – leading to larger gaps between whites and blacks in wages, marriage patterns, poverty, single-parenthood, and death rates. The results are robust to the inclusion or exclusion of several control variables, and the use of a "shift-share" instrument for the local manufacturing employment share. Overall, the decline in manufacturing is reducing socio-economic conditions in general while increasing inequality within and between racial groups – which is consistent with a stronger general equilibrium effect of the loss of highly-paid, lower-skilled jobs on the less-educated segments of the population.

Keywords: racial gaps, manufacturing decline

JEL Classification: J10

Suggested Citation

Gould, Eric D., Torn Apart? The Impact of Manufacturing Employment Decline on Black and White Americans. IZA Discussion Paper No. 11614, Available at SSRN: https://ssrn.com/abstract=3209708 or http://dx.doi.org/10.2139/ssrn.3209708

Eric D. Gould (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

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Jerusalem, 91905
Israel
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HOME PAGE: https://sites.google.com/site/edgould

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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