Abstract
Economic Inequality The earnings gap between white and Black workers in the United States fell substantially only once over the past 70 years. Derenoncourt and Montialoux show how this change was driven in large part by the 1967 extension of the federal minimum wage to sectors that employed about 20% of the total U.S. workforce but nearly a third of Black workers, including agriculture, hotels, and schools. This policy extension can explain more than 20% of the decline in the racial earnings gap between 1965 and 1980 and did not have large adverse employment effects on either Black or white workers. The gap between the average wage in the treated industries and the rest of the economy fell, as did the gap between Black and white workers within the treated industries. Q. J. Econ. 10.1093/qje/qjaa031 (2020).
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