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Open Access Publications from the University of California

The Impact of City Contracting Set-Asides on Black Self-Employment and Employment

  • Author(s): Chatterji, Aaron K
  • Chay, Kenneth Y
  • Fairlie, Robert W
  • et al.

In the 1980s, many U.S. cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimatetheir impacts on the self-employment and employment rates of African-American men. Black business ownership rates increased significantly after program initiation, with the black-white gap falling three percentage points. The evidence that the racial gap in employment also fell is less clear as it is depends on assumptions about the continuation of pre-existing trends. The black gains were concentrated in industries heavily affected by set-asides and mostly benefited the better educated.

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