University of California, Los Angeles
Institutional Affiliation: University of California, Los Angeles
NBER Working Papers and Publications
|August 2020||Discrimination and Racial Disparities in Labor Market Outcomes: Evidence from WWII|
with , , : w27689
The 1940s witnessed substantial reductions in the Black-white earnings gap. We study the role that domestic WWII defense production played in reducing this gap. Exploiting variation across labor markets in the allocation of war contracts to private firms, we find that war production contracts resulted in significant increases in the earnings of Black workers and declines in the racial wage gap, with no effect on white workers. This was achieved via occupational upgrading among Black men to skilled occupations. The gains largely persisted through at least 1970. Using a structural model, we show that declines in discrimination (and not migration or changes in productivity) account for all of the occupational upgrading and half of the estimated wage gains associated with the war production ef...