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

March 2013

Aaron K. Chatterji, Duke University, Kenneth Y. Chay, Brown University, and Robert W. Fairlie, University of California, Santa Cruz

Download '2013-04-npc-working-paper.pdf'.


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 estimate their 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.

Employment, Unemployment, and the Labor Market, Race and Ethnicity