Lunch and Rees Lecture, "Race, Labor Markets, and the Long Shadow of History" by Kerwin K. Charles, Yale University

Dr. Charles began the lecture by highlighting how Albert Rees was part of a generation of economists who were foundational to the modern field of labor economics. One important aspect these economists studied was racial differences – especially Black-white differences – in labor market outcomes. A major contribution of these early scholars in studying these phenomena was to separate and clearly define terms (e.g. demonstrating that discrimination does not equal segregation). Kerwin pointed out this generation of economists had reason to be optimistic about declining racial gaps in the job market as, in the decades following the second world war, there were gradual yet steady improvements in public sentiment, and shifting political and legal forces related to racial integration. Unfortunately, however, progress stalled in the latter decades of the twentieth century. For example, the Black-white log earnings gap shrank then stabilized.

A new generation of economists have helped us better understand the persistence of these gaps. Among other contributions, these scholars have examined how convergence in outcomes is broadly determined by rank and level gaps. Much work has documented improvements in the former, but not the latter in the last four decades. Moreover, conditional rank gaps persist, suggesting race-specific factors. The influence of geographic sorting undoubtedly also plays an important role. For instance, racial gaps in economic outcomes are correlated with levels of prejudice. The influence of historical factors, such as segregation, has foundational importance, but has been relatively understudied by labor economists. This motivates the idea of “missing neighborhoods”, places that are high both in economic quality and racial equality. The use of detailed neighborhood data through the projects, such as Opportunity Insights, have enabled examination of the extent to which these missing neighborhoods contribute to persistent racial gaps. A key takeaway is that racial fluidity within a neighborhood can be affected by interactions today.

One question asked at the end of the lecture was related to whether economics as a profession has taken the right path by playing less of an advocacy role relative to other social science fields. Charles cited the high bar the field places for evidence as one hesitation he has to offer specific policy recommendations. Nonetheless, he believes economists can still play an important role in policy discussions by asking for the level of rigor and specificity the field holds for itself.

Thank you to Keanan Gleason, PhD Student, University of Colorado Boulder, for this recap.