The Costs of Employment Segregation: Evidence from the Federal Government under Woodrow Wilson

Abhay Aneja and Guo Xu

No 27798, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We link newly-digitized personnel records of the U.S. government for 1907-1921 to census data to study the segregation of the civil service by race under President Woodrow Wilson. Using a difference-in-differences design around Wilson’s inauguration, we find that the introduction of employment segregation increased the black-white earnings gap by 3.4-6.9 percentage points. This increasing gap is driven by a reallocation of existing black civil servants to lower-paid positions, lowering their returns to education. Importantly, the negative effects extend beyond Wilson’s presidency. Using census data for 1900-1940, we show that segregation caused a relative decline in the home ownership rate of black civil servants. Moreover, by comparing children of black and white civil servants in adulthood, we provide evidence that descendants of black civil servants who were exposed to Wilson’s presidency exhibit lower levels of education, earnings, and social mobility. Our combined results thus document significant short and long-run costs borne by minorities during a unique episode of state-sanctioned discrimination.

JEL-codes: J15 J45 M5 N4 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-his, nep-lab and nep-ure
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Published as Abhay Aneja & Guo Xu, 2022. "The Costs of Employment Segregation: Evidence from the Federal Government Under Woodrow Wilson," The Quarterly Journal of Economics, vol 137(2), pages 911-958.

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