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Agglomeration Economies and Race Specific Spillovers

Author

Listed:
  • Elizabeth Ananat

    (Barnard College, Columbia University)

  • Shihe Fu

    (Southwest University of Finance and Economics)

  • Stephen L. Ross

    (University of Connecticut)

Abstract

Racial social isolation within workplaces may reduce firm productivity. We provide descriptive evidence that African-Americans feel socially isolated from whites. To test whether isolation affects productivity, we estimate models of Total Factor Productivity for manufacturing firms allowing the returns to concentrated economic activity and human capital to vary by the match between each establishment's racial and ethnic composition and the composition of local area employment. Higher own-race representation increases the productivity return from employment density and concentrations of college educated workers. Looming demographic changes suggest that this drag on economic productivity may increase over time.

Suggested Citation

  • Elizabeth Ananat & Shihe Fu & Stephen L. Ross, 2020. "Agglomeration Economies and Race Specific Spillovers," Working Papers 2020-069, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2020-069
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Ananat_Fu_Ross_2020_agglomeration-economies-race-spillovers.pdf
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    References listed on IDEAS

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    1. Aliprantis, Dionissi & Carroll, Daniel R. & Young, Eric R., 2024. "What explains neighborhood sorting by income and race?," Journal of Urban Economics, Elsevier, vol. 141(C).

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    More about this item

    Keywords

    agglomeration economies; firm productivity; human capital externalities; information networks; racial and ethnic isolation;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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