Race-Specific Agglomeration Economies: Social Distance and the Black-White Wage Gap

Elizabeth Ananat, Shihe Fu () and Stephen Ross

No 18933, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present evidence that benefits from agglomeration concentrate within race. Cross-sectionally, the black-white wage gap increases by 2.5% for every million-person increase in urban population. Within cities, controlling for unobservable productivity through residential-tract-by-demographic indicators, blacks’ wages respond less than whites’ to surrounding economic activity. Individual wage returns to nearby employment density and human capital rise with the share of same-race workers. Manufacturing firms’ productivity rises with nearby activity only when they match nearby firms racially. Weaker cross-race interpersonal interactions are a plausible mechanism, as blacks in all-white workplaces report less closeness to whites than do even whites in all-nonwhite workplaces.

JEL-codes: J15 J24 J31 R23 R32 (search for similar items in EconPapers)
Date: 2013-04
Note: CH LS
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Citations: View citations in EconPapers (33)

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Related works:
Working Paper: Race-Specific Agglomeration Economies: Social Distance and the Black-White Wage Gap (2014)
Working Paper: RACE-SPECIFIC AGGLOMERATION ECONOMIES: SOCIAL DISTANCE AND THE BLACK-WHITE WAGE GAP (2013)
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