Racial Animosity and Black Financial Advisor Underrepresentation

Jeffrey A. DiBartolomeo, Michael G. Kothakota, Elizabeth Parks-Stamm and Derek Tharp

No dkh5v, SocArXiv from Center for Open Science

Abstract: This study investigates whether racial animosity across metropolitan markets is associated with Black financial advisor underrepresentation. Using a dataset of all U.S. securities-licensed individuals (N = 642,543), we first estimate the racial and ethnic composition of the industry using an algorithm that accounts for name, gender, and location. Second, we use a dataset enhanced by a commercial vendor to restrict the analysis to only those identified as working as financial advisors (n = 237,435). Using racially charged Google search queries as a proxy for racial animosity, we find that greater racial animosity is associated with greater Black advisor underrepresentation. We estimate lower underrepresentation of 0.9 percentage points when comparing markets with the highest and lowest levels of animosity. For the average market with an estimated 11.4% Black advisor representation, an increase of 0.9 percentage points would represent a 7.9% increase in Black advisor representation.

Date: 2021-04-18
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:dkh5v

DOI: 10.31219/osf.io/dkh5v

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