Racial Differences in the Unemployment Response to Structural Changes in Local Labor Markets

This analysis uses establishment-level data on job creation and destruction to examine the unemployment rate responses of black, Hispanic and white workers to shifts in demand across firms and industries during the period 1980-84. Black unemployment rates are significantly more responsive to differences in aggregate demand growth and wage flexibility than are white and Hispanic unemployment rates, and they are also more severely impacted by structural changes in labor demand than are white and Hispanic unemployment rates. Additional research using the measures and focus of the present analysis that cover other time periods can assist in developing a clearer picture of the contemporary dynamics of urban labor markets and can provide guidance for public policy.