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The Role of Homophily in Response to Labor Market Opportunities: Differences Across Race and Ethnicity
March 2026
Working Paper Number:
CES-26-22
This paper investigates the role that homophily might play in explaining racial/ethnic disparities in the labor market. We find that Black and Hispanic workers are less responsive than White workers to changes in job opportunities, but responsiveness increases when those opportunities present themselves in locations with a higher share own-race population. The analysis makes use of restricted American Community Survey data, accessible through the Federal Statistical Research Data Centers, allowing us to include commuting zones that may otherwise not be identified because of suppressed location information in the public data
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Neighborhood Racial Status and White Out-Mobility
March 2026
Working Paper Number:
CES-26-19
Drawing on American Community Survey data, this study examines how whites' relative socioeconomic standing vis-'-vis nonwhite neighbors affects the association between minority presence and white out-mobility. Moving beyond the racial preferences versus racial proxy debate, we integrate group competition and contact theories with status theory to conceptualize 'racial status' as whites' first-order income rank relative to the subgroup status of Black, Hispanic, and Asian residents at the census tract level. Multilevel linear probability models show that whites lacking advantaged status are generally more likely to move. However, the positive association between Black or Asian concentration and white departure is weaker among status-disadvantaged whites, while the negative association with Hispanic concentration is stronger. These patterns lend greater support to contact theory than to group competition theory. By foregrounding relative status, the study demonstrates that racial and socioeconomic mechanisms are intertwined in shaping white residential mobility.
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Non-Random Assignment of Individual Identifiers and Selection into Linked Data: Implications for Research
January 2026
Working Paper Number:
CES-26-06
The U.S. Census Bureau's Person Identification Validation System facilitates anonymous linkages between survey and administrative records by assigning Protected Identification Keys (PIKs) to person records. While PIK assignment is generally accurate, some person records are not successfully assigned a PIK, which can lead to sample selection bias in analyses of linked data. Using the American Community Survey (ACS) and the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) between 2005 and 2022, we corroborate and extend existing findings on the drivers of PIK assignment, showing that the rate of PIK assignment varies widely across socio-demographic subgroups. Using earnings as a test case, we then show that limiting a survey sample of wage earners to person records with PIKs or successful linkages to W-2 wage records tends to overestimate self-reported wage earnings, on average, indicative of linkage-induced selection bias. In a validation exercise, we demonstrate that reweighting methods, such as inverse probability weighting or entropy balancing, can mitigate this bias.
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Differences in Disability Insurance Allowance Rates
August 2025
Working Paper Number:
CES-25-54
Allowance rates for disability insurance applications vary by race and ethnicity, but it is unclear to what extent these differences are artifacts of other differing socio-economic and health characteristics, or selection issues in SSA's race and ethnicity data. This paper uses the 2015 American Community Survey linked to 2015-2019 SSA administrative data to investigate DI application allowance rates among non-Hispanic White, non-Hispanic Black, non-Hispanic Asian, non-Hispanic American Indian/Alaska Native, and Hispanic applicants aged 25-65. The analysis uses regression, propensity score matching, and inverse probability weighting to estimate differences in allowance rates among applicants who are similar on observable characteristics. Relative to raw comparisons, differences by race and ethnicity in multivariate analyses are substantially smaller in magnitude and are generally not statistically significant.
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Credit Access in the United States
July 2025
Working Paper Number:
CES-25-45
We construct new population-level linked administrative data to study households' access to credit in the United States. These data reveal large differences in credit access by race, class, and hometown. By age 25, Black individuals, those who grew up in low-income families, and those who grew up in certain areas (including the Southeast and Appalachia) have significantly lower credit scores than other groups. Consistent with lower scores generating credit constraints, these individuals have smaller balances, more credit inquiries, higher credit card utilization rates, and greater use of alternative higher-cost forms of credit. Tests for alternative definitions of algorithmic bias in credit scores yield results in opposite directions. From a calibration perspective, group-level differences in credit scores understate differences in delinquency: conditional on a given credit score, Black individuals and those from low-income families fall delinquent at relatively higher rates. From a balance perspective, these groups receive lower credit scores even when comparing those with the same future repayment behavior. Addressing both of these biases and expanding credit access to groups with lower credit scores requires addressing group-level differences in delinquency rates. These delinquencies emerge soon after individuals access credit in their early twenties, often due to missed payments on credit cards, student loans, and other bills. Comprehensive measures of individuals' income profiles, income volatility, and observed wealth explain only a small portion of these repayment gaps. In contrast, we find that the large variation in repayment across hometowns mostly reflects the causal effect of childhood exposure to these places. Places that promote upward income mobility also promote repayment and expand credit access even conditional on income, suggesting that common place-level factors may drive behaviors in both credit and labor markets. We discuss suggestive evidence for several mechanisms that drive our results, including the role of social and cultural capital. We conclude that gaps in credit access by race, class, and hometown have roots in childhood environments.
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Re-assessing the Spatial Mismatch Hypothesis
April 2025
Working Paper Number:
CES-25-23
We use detailed location information from the Longitudinal Employer-Household Dynamics (LEHD) database to develop new evidence on the effects of spatial mismatch on the relative earnings of Black workers in large US cities. We classify workplaces by the size of the pay premiums they offer in a two-way fixed effects model, providing a simple metric for defining 'good' jobs. We show that: (a) Black workers earn nearly the same average wage premiums as whites; (b) in most cities Black workers live closer to jobs, and closer to good jobs, than do whites; (c) Black workers typically commute shorter distances than whites; and (d) people who commute further earn higher average pay premiums, but the elasticity with respect to distance traveled is slightly lower for Black workers. We conclude that geographic proximity to good jobs is unlikely to be a major source of the racial earnings gaps in major U.S. cities today.
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Income, Wealth, and Environmental Inequality in the United States
October 2024
Working Paper Number:
CES-24-57
This paper explores the relationships between air pollution, income, wealth, and race by combining administrative data from U.S. tax returns between 1979'2016, various measures of air pollution, and sociodemographic information from linked survey and administrative data. In the first year of our data, the relationship between income and ambient pollution levels nationally is approximately zero for both non-Hispanic White and Black individuals. However, at every single percentile of the national income distribution, Black individuals are exposed to, on average, higher levels of pollution than White individuals. By 2016, the relationship between income and air pollution had steepened, primarily for Black individuals, driven by changes in where rich and poor Black individuals live. We utilize quasi-random shocks to income to examine the causal effect of changes in income and wealth on pollution exposure over a five year horizon, finding that these income'pollution elasticities map closely to the values implied by our descriptive patterns. We calculate that Black-White differences in income can explain ~10 percent of the observed gap in air pollution levels in 2016.
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Separate but Not Equal: The Uneven Cost of Residential Segregation for Network-Based Hiring
October 2024
Working Paper Number:
CES-24-56
This paper studies how residential segregation by race and by education affects job search via neighbor networks. Using confidential microdata from the US Census Bureau, I measure segregation for each characteristic at both the individual level and the neighborhood level. My findings are manifold. At the individual level, future coworkership with new neighbors on the same block is less likely among segregated individuals than among integrated workers, irrespective of races and levels of schooling. The impacts are most adverse for the most socioeconomically disadvantaged demographics: Blacks and those without a high school education. At the block level, however, higher segregation along either dimension raises the likelihood of any future coworkership on the block for all racial or educational groups. My identification strategy, capitalizing on data granularity, allows a causal interpretation of these results. Together, they point to the coexistence of homophily and in-group competition for job opportunities in linking residential segregation to neighbor-based informal hiring. My subtle findings have important implications for policy-making.
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Estimating the Potential Impact of Combined Race and Ethnicity Reporting on Long-Term Earnings Statistics
September 2024
Working Paper Number:
CES-24-48
We use place of birth information from the Social Security Administration linked to earnings data from the Longitudinal Employer-Household Dynamics Program and detailed race and ethnicity data from the 2010 Census to study how long-term earnings differentials vary by place of birth for different self-identified race and ethnicity categories. We focus on foreign-born persons from countries that are heavily Hispanic and from countries in the Middle East and North Africa (MENA). We find substantial heterogeneity of long-term earnings differentials within country of birth, some of which will be difficult to detect when the reporting format changes from the current two-question version to the new single-question version because they depend on self-identifications that place the individual in two distinct categories within the single-question format, specifically, Hispanic and White or Black, and MENA and White or Black. We also study the USA-born children of these same immigrants. Long-term earnings differences for the 2nd generation also vary as a function of self-identified ethnicity and race in ways that changing to the single-question format could affect.
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Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility
July 2024
Working Paper Number:
CES-24-38
We show that intergenerational mobility changed rapidly by race and class in recent decades and use these trends to study the causal mechanisms underlying changes in economic mobility. For white children in the U.S. born between 1978 and 1992, earnings increased for children from high-income families but decreased for children from low-income families, increasing earnings gaps by parental income ('class') by 30%. Earnings increased for Black children at all parental income levels, reducing white- Black earnings gaps for children from low-income families by 30%. Class gaps grew and race gaps shrank similarly for non-monetary outcomes such as educational attainment, standardized test scores, and mortality rates. Using a quasi-experimental design, we show that the divergent trends in economic mobility were caused by differential changes in childhood environments, as proxied by parental employment rates, within local communities defined by race, class, and childhood county. Outcomes improve across birth cohorts for children who grow up in communities with increasing parental employment rates, with larger effects for children who move to such communities at younger ages. Children's outcomes are most strongly related to the parental employment rates of peers they are more likely to interact with, such as those in their own birth cohort, suggesting that the relationship between children's outcomes and parental employment rates is mediated by social interaction. Our findings imply that community-level changes in one generation can propagate to the next generation and thereby generate rapid changes in economic mobility.
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