Working Paper: NBER ID: w20095
Authors: Abigail K. Wozniak
Abstract: Nearly half of U.S. employers test job applicants and workers for drugs. A common assumption is that the rise of drug testing must have had negative consequences for black employment. However, the rise of employer drug testing may have benefited African-Americans by enabling non-using blacks to prove their status to employers. I use variation in the timing and nature of drug testing regulation to identify the impacts of testing on black hiring. Black employment in the testing sector is suppressed in the absence of testing, a finding which is consistent with ex ante discrimination on the basis of drug use perceptions. Adoption of pro-testing legislation increases black employment in the testing sector by 7-30% and relative wages by 1.4-13.0%, with the largest shifts among low skilled black men. Results further suggest that employers substitute white women for blacks in the absence of testing.
Keywords: drug testing; black employment; labor market discrimination
JEL Codes: J24; J7; J8
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| absence of drug testing (Z28) | suppress black employment in the testing sector (J79) |
| drug testing (Z28) | increases employability of non-using blacks (J68) |
| pro-testing legislation (K16) | increases black employment in the testing sector (J68) |
| pro-testing legislation (K16) | increases relative wages for black workers (J79) |
| absence of drug testing (Z28) | employers substitute white women for black workers (J79) |
| observed increases in employment and wages for low-skilled black men (J79) | are statistically significant (C12) |