Industry racial employment by skill level: The effects of market structure and racial wage gaps

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Theories of expense preference suggest that market power gives employers the latitude to engage in employment discrimination. Additionally, labor market theory indicates that discrimination should cause a larger decline in black employment for prevalent and easily replaced low-skill workers relative to scarce, high-skill workers. Using industry-level data, we examine the relationship between worker skill level, market structure, and racial employment and we find that noncompetitive market structure reduces black employment for low-skill workers. In general, our findings indicate that market structure has less influence on the racial composition of highly trained workers relative to easily replaced low-skill workers