Working Paper: NBER ID: w27798
Authors: Abhay Aneja; Guo Xu
Abstract: We link newly-digitized personnel records of the U.S. government for 1907-1921 to census data to study the segregation of the civil service by race under President Woodrow Wilson. Using a difference-in-differences design around Wilson’s inauguration, we find that the introduction of employment segregation increased the black-white earnings gap by 3.4-6.9 percentage points. This increasing gap is driven by a reallocation of existing black civil servants to lower-paid positions, lowering their returns to education. Importantly, the negative effects extend beyond Wilson’s presidency. Using census data for 1900-1940, we show that segregation caused a relative decline in the home ownership rate of black civil servants. Moreover, by comparing children of black and white civil servants in adulthood, we provide evidence that descendants of black civil servants who were exposed to Wilson’s presidency exhibit lower levels of education, earnings, and social mobility. Our combined results thus document significant short and long-run costs borne by minorities during a unique episode of state-sanctioned discrimination.
Keywords: employment segregation; racial inequality; federal government; Woodrow Wilson; earnings gap
JEL Codes: J15; J45; M5; N4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Wilson's segregation policy (I28) | black-white earnings gap (J31) |
| reallocation of black civil servants to lower-paid positions (J68) | black-white earnings gap (J31) |
| Wilson's segregation policy (I28) | returns to education for black civil servants (I26) |
| black civil servants (J45) | home ownership rates (R21) |
| exposure to Wilson's presidency (I00) | descendants of black civil servants' education (I24) |
| exposure to Wilson's presidency (I00) | descendants of black civil servants' earnings (J79) |
| exposure to Wilson's presidency (I00) | descendants of black civil servants' social mobility (J62) |
| Wilson's segregation policy (I28) | misallocation of talent within the federal bureaucracy (D73) |