RACE, RECESSION, AND SOCIAL CLOSURE IN THE LOW-WAGE LABOR MARKET: EXPERIMENTAL AND OBSERVATIONAL EVIDENCE

This paper tests whether employers responded particularly negatively to African American job applicants during the deep U.S. recession that began in 2007. Theories of labor queuing and social closure posit that members of privileged groups will act to minimize labor market competition in times of economic turbulence, which could advantage Whites relative to African Americans. Although social closure should be weakest in the less desirable, low-wage job market, it may extend downward during recessions, pushing minority groups further down the labor queue and exacerbating racial inequalities in hiring. We consider two complementary data sources: (1) a field experiment with a randomized block design and (2) the nationally representative NLSY97 sample. Contrary to expectations, both analyses reveal a comparable recession-based decline in job prospects for White and African American male applicants, implying that hiring managers did not adapt new forms of social closure and demonstrating the durability of inequality even in times of structural change. Despite this proportionate drop, however, the recession left African Americans in an extremely disadvantaged position. Whites during the recession obtained favorable responses from employers at rates similar to African Americans prior to the recession. The combination of experimental methods and nationally representative longitudinal data yields strong evidence on how race and recession affect job prospects in the low-wage labor market.