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Empirical Research on Affirmative Action
3. EMPIRICAL RESEARCH ON AFFIRMATIVE ACTION AND ANTI-DISCRIMINATION
Modern affirmative action, then, was established as policymakers
groped for a way to address continuing problems of discrimination.
Has it worked to help eradicate or prevent such discrimination?
In a fundamental sense the question must be posed for the broader
society-wide effort of which federal programs are only an element
and, ideally, a model.
3.1 Review of the Empirical Literature, in Summary
Over the past three decades, minorities and women have made real,
undisputable economic progress. Before the Civil Rights Act of
1964, the median black male worker earned only about 60 percent
as much as the median white male worker; (10) by 1993, the median
black male earned 74 percent as much as the median white male. (11) The male-female
wage gap has also narrowed since the 1960s: median female earnings
relative to median male earnings rose from about 60 percent during
the 1960s to 72 percent in 1993. (12)
This section of the Report addresses three issues: (1) Why has
there been an earnings gap between black and white workers, and
what role did anti-discrimination legislation and affirmative
action play in the reduction of that gap? (Earnings gaps for Hispanics
and Asians also exist which have been linked to discrimination.
The wage gaps for African Americans and women are examined here
in detail in order to illustrate the relationship between the
problems and historic solutions.) (2) Why has there also been
an earnings gap between men and women, and what role did government
policies play in the reduction of that gap? (3) Is there any evidence
that affirmative action boosted minority or female employment?
3.2 Effect on Earnings
3.2.1 Anti-Discrimination Policy, the Minority-White Earnings
The ratio of the average black workers' earnings to the average
white workers' earnings increased significantly in the 1940s,
increased slightly if at all in the 1950s, increased significantly
between 1960 and the mid 1970s, and declined somewhat since the
late 1970s. (13)
Hispanic men earn 81 percent of the wages earned by white men
at the same education level. Hispanic women earn less than 65
percent of the income earned by white men with the same education
There has not been an improvement in the employment-population
rate of black workers relative to whites since the 1960s. If anything,
there has been a deterioration in the relative employment-population
Education and work experience are the two most reliable predictors
of a worker's earnings. Black workers historically have had much
lower education than white workers. Adjusting for racial differences
in education and work experience can account for about half of
the wage gap between black men and white men, and about one-third
of the gap between black women and white women. Additionally,
holding constant differences in individuals' test scores leads
to a further reduction in the black-white earnings gap. For example,
in one study, in 1991, black males earned 29 percent less than
white males without any adjustments, 15 percent less after adjusting
for education and experience, and 9 percent less after additionally
adjusting for test scores. For women, the gap declines from 14
percent to almost zero after making these adjustments. (16) There is
some controversy as to how to interpret the black-white wage gap
after holding constant differences in education, test scores,
and other variables. In particular, differences in education or
test scores may themselves represent the discrimination. Thus,
the reduction in the racial gap after controlling for these factors
may not mean that discrimination is any less, but it may mean
that attention should also focus on discrimination prior to entry
into the labor market.
Historically there have been great differences in the quality
of education between black and white students. In South Carolina
in 1920, for example, black students attended schools with class
sizes twice those of white schools. Partly as a result of the
Civil Rights Act of 1964, the Elementary and Secondary Education
Act of 1965, and the Green decision, schools became increasingly
integrated in the late 1960s. The improvement in the quality and
quantity of education of black workers since the 1960s accounts
for about 20 percent of the gain in black workers' relative earnings.
There is near-unanimous consensus among economists that the government
anti-discrimination programs beginning in 1964 contributed to
the improved income of African Americans. Nevertheless, it is
difficult to draw conclusions about which specific anti-discrimination
programs were most effective. And it may well be that the programs
collectively helped even though no single program was overwhelmingly
3.2.2 Anti-Discrimination Policy and the Male-Female Earnings
The female-to-male ratio of earnings of full-time, year-round
workers was roughly stable at around 60 percent from the early
1900s until the mid 1970s. In 1993, earnings of women who worked
full-time, year-round had risen to 72 percent as much as men.
After adjusting for differences in education, experience, and
other factors, the wage gap is reduced by about half (i.e., the
adjusted ratio is approximately 85 percent). (19)
An increase in women's work experience and a shift into higher-wage
occupations are the major causes of their improved economic position
relative to men. The decline in higher-paying manufacturing jobs,
which is partly responsible for the decline in the earnings of
less-skilled men, has also contributed to the narrowing of the
male-female wage gap. Nevertheless, a substantial part of the
improved earnings of women cannot be explained by these factors,
and probably reflects a decline in discrimination. (20)
The relative roles in this story of anti-discrimination laws and
affirmative action, in education and the workplace, are unclear.
The major equal opportunity laws covering women were passed in
the mid-1960s, and the most rapid growth in women's earnings and
occupational status did not begin for another decade. The lag
between the change in law and the increase in earnings may be
due to time it took for women to acquire education and training
for traditionally male-dominated occupations. The rapid growth
in the number of female graduates from professional schools coincided
with increased anti-discrimination efforts.
3.3 Effect on Employment
The Labor Department's Office of Federal Contract Compliance Programs
(OFCCP) administers Executive Order 11246, which imposes nondiscrimination
and affirmative action obligations on most firms that contract
to do business with the Federal government. According to five
academic studies, active enforcement by OFCCP during the 1970s
caused government contractors to moderately increase their hiring
of minority workers. (22)
According to one study, for
example, the employment share of black males in contractor firms increased
from 5.8 percent in 1974 to 6.7 percent in 1980. In non-contractor
firms, the black male share increased more modestly, from 5.3
percent to 5.9 percent. For white males, the employment share
fell from 58.3 percent to 53.3 percent in contractor firms, and
from 44.8 percent to 41.3 percent in non-contractor firms.
The literature also finds that contractor establishments that
underwent an OFCCP review in the 1970s subsequently had faster
rates of white female and of black employment growth than contracting
firms that did not have a review. (24)
Other than studies comparing employment records of government
contractors with non-government contractors, it is hard to separate
the effects of affirmative action from broader civil rights enforcement.
Non-government contractors often took active steps to ensure diversity
and compliance with equal opportunity laws, even though they were
not covered by the OFCCP. Some, or perhaps much, of this behavior
may be attributable to government anti-discrimination efforts.
Also, the recruitment efforts of both contractors and non-contractors
may have bid up the wages of minorities and women, reducing wage
disparities regardless of the effect on occupational disparities.
OFCCP enforcement was greatly scaled back during the 1980s. For
example, the real budget and staffing for affirmative action programs
was reduced after 1980. Over the same period, fewer administrative
complaints were filed and back-pay awards were phased out. Perhaps
not surprisingly, available evidence suggests that OFCCP did not
have a noticeable impact on the hiring of minority workers by
contractor firms in the early and mid 1980s.
Although the literature clearly shows that, when actively enforced,
affirmative action can lead to an increase in minority employment
in contractor firms, some have questioned whether this employment
represents a net gain or merely a shift of minority employees
from non-contractors to contractors.
The extent to which affirmative action has expanded minority employment
in skilled positions is unclear. The academic literature suggests
that before 1974, minority employment growth in contractor firms
was predominately in unskilled positions. Since 1974, there is
evidence of modest occupational advance in contractor firms. But
some researchers think this may be the result of biased reporting.
There is no systematic qualitative evidence that productivity
is lower in contracting firms as a result of OFCCP. The one systematic
study found that contractors do not appear to have lower productivity,
suggesting that OFCCP has not caused firms to hire or promote
less qualified workers. (27)