The Impact of City Contracting Set-Asides on Black Self-Employment and Employment

61 Pages Posted: 30 Mar 2013

See all articles by Aaron Chatterji

Aaron Chatterji

Duke University - Fuqua School of Business

Kenneth Y. Chay

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Robert W. Fairlie

University of California, Santa Cruz - Department of Economics; National Bureau of Economic Research

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Abstract

In the 1980s, many U.S. cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimate their impacts on the self-employment and employment rates of African-American men. Black business ownership rates increased significantly after program initiation, with the black-white gap falling three percentage points. The evidence that the racial gap in employment also fell is less clear as it is depends on assumptions about the continuation of pre-existing trends. The black gains were concentrated in industries heavily affected by set-asides and mostly benefited the better educated.

Keywords: contracting, African-American, black, race, self-employment, entrepreneurship, affirmative action

JEL Classification: J15, L26

Suggested Citation

Chatterji, Aaron and Chay, Kenneth Y. and Fairlie, Robert W., The Impact of City Contracting Set-Asides on Black Self-Employment and Employment. IZA Discussion Paper No. 7298, Available at SSRN: https://ssrn.com/abstract=2241982

Aaron Chatterji (Contact Author)

Duke University - Fuqua School of Business ( email )

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Kenneth Y. Chay

University of California, Berkeley - Department of Economics ( email )

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Robert W. Fairlie

University of California, Santa Cruz - Department of Economics ( email )

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HOME PAGE: http://www.nber.org/people/robert_fairlie?page=1&perPage=50

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