The impact of city contracting set-asides on black self-employment and employment

In the 1980s, many US cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimate their impacts on the self-employment and employment rates of AfricanAmericanmen. Black business ownership rates increased significantly after program initiation, with the black-white gap falling 3 percentage points. The evidence that the racial gap in employment also fell is less clear as it depends on assumptions about the continuation of preexisting trends. The black gains were concentrated in industries heavily affected by set-asides, and they mostly benefited the better educated. © 2014 by The University of Chicago. All rights reserved.

Duke Scholars

Author Aaron Chatterji Fuqua School of Business