The Persistent Effects of Decreasing Labor-Market Discrimination*

Racial disparities in labor markets are pervasive. We study a time period, the 1940s, featuring persistent labor-market improvements for Black workers, which we trace to the WWII production effort. Government war contracts not only increased demand for labor, generating labor shortages, but also barred racial discrimination in hiring. This combination led to increased hiring of Black workers into skilled positions, thereby raising their wages through at least 1970, long after the war contracts and requirement of non-discrimination had ended. This persistence is due to a decline in discrimination, manifested in part through union integration. The effects of WWII production transmit to the next generation, as evidenced by the higher HS completion rates of Black children, suggesting that labor-market interventions that reduce discrimination can increase rates of mobility among Black families. *Anna Aizer, Brown University (aizer@brown.edu); Ryan Boone, UCLA (ryanfboone@gmail.com); Adriana Lleras-Muney, UCLA (allerasmuney@gmail.com); Jonathan Vogel, UCLA (jonathan.e.vogel@gmail.com). We are very grateful to seminar participants from the California Center for Population Research (CCPR) at UCLA, Bonn University, University of Chicago, Emory University, the Minneapolis Federal Reserve, MIT, Norwegian School of Economics, University of Pittsburgh, Stanford University, Vanderbilt University, and Williams College. Claudia Goldin generously shared her education data and Nicole Gorton provided outstanding research assistance. This project was supported by the CCPR at UCLA, which receives core support (P2CHD041022) from the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD).