CREAT: Census Research Exploration and Analysis Tool

What Happens to Contractors After States Ban Affirmative Action?

July 2026

Written by: Benjamin V. Rosa

Working Paper Number:

CES-26-41

Abstract

Using restricted Census business records, I explore how banning affirmative action in state contracting affects minority- and women-owned business enterprises (MWBEs). I find that ending affirmative action led MWBE contractors to gradually downsize, with the most pronounced reductions in force experienced by Black-owned businesses and larger MWBEs. Despite these workforce changes, existing MWBEs were no more likely to shut down than other businesses. New MWBEs were relatively less common after a state's ban, highlighting how bans can shift the demographic composition of new contractors. A calibrated model suggests bans are equivalent to considerable reductions in MWBE productivity and scrap values.

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:
agency, employee, employ, employed, minority, labor, discrimination, discriminatory, workforce, racial, declining, decline, census business, unemployment rates, disparity, 2010 census, mandate, census disclosure, employment declines, minority business

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:
Internal Revenue Service, Small Business Administration, Longitudinal Business Database, Employer Identification Numbers, Council of Economic Advisers, North American Industry Classification System, Census Bureau Disclosure Review Board, Survey of Business Owners, 2010 Census, Annual Business Survey

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