Long-Run Determinants of US Racial Inequality: Evidence From the Great Migration and the FLSA

Abstract

Racial economic divides seem a fixed feature of American society. Yet the past 75 years have witnessed important shifts in this dimension of inequality. This dissertation studies two key episodes in American economic history that have shaped current patterns of racial disparities. The first chapter examines the role of the Great Migration in the changing geography of upward mobility for black families. I show that northern cities responded endogenously to black population increases during the Great Migration, lowering the gains from growing up in destination cities and widening the racial gap in upward mobility in the region. The second chapter explores mechanisms of the Migration’s effect on upward mobility. Starting in the 1960s, destination commuting zones exhibited higher white private school enrollment rates, greater investment in police services, higher urban murder rates, and increased incarceration, suggesting rising segregation and urban decline as plausible channels. The third chapter of the dissertation uncovers the role of federal minimum wage policy in the sharp decline of racial earnings gaps during the Civil Rights Era. The 1966 Fair Labor Standards Act extended federal minimum wage coverage to retail, services, agriculture, and other sectors where black workers were overrepresented. The reform increased wages for workers in newly covered industries, with twice as large an effect on black workers as on white, and with no detectable effects on employment. The 1966 extension can explain 20% of the reduction in the racial earnings gap in the late 1960s and early 1970s.