Black progress gets a new explanation from new professor

It’s probably no shock to you that black Americans earn less than whites. On an hourly basis, black workers make somewhere between 20-25% less than white workers, even when looking at workers with similar skills, occupations, and education levels.  

But what you probably don’t realize is that the earnings-gap between black and white workers hasn’t been narrowing; it’s actually been the same for the past fifty years. Yes, that’s fifty. In fact, post-Civil War, the only time that the black-white earnings gap shrank was between the 1940s and 60s. Other than that, it’s been steady.

And in those fifty years, academics have put forth a thousand theories as to what caused the black progress of the 1940s-1960s. The most popular is related to the Great Migration, in which blacks from the South migrated to industrial centers in the North and West, which offered them better wages. But that explanation ignores that blacks in the South also saw progress during this time.  

New Pitt professor Andy Ferrara offers another explanation for black progress during the period: World War II. More specifically, casualties from World War II. During the war, nearly 400 thousand Americans died, while another 700 thousand were wounded. The majority of these soldiers were whites, who worked in semi-skilled occupations (think factory workers). Ferrara finds that these casualties, combined with the high demand for labor during and after the war, led to employment opportunities for blacks that they had previously been barred from; occupations which had been dominated by white workers began hiring black workers to fill vacancies caused by war casualties.

The tight labor market during and after the war lead to substantial economic gains for blacks, as the share of blacks working in semi-skilled occupations increased more in the 1940s than it had in the previous seven decades combined. Ferrara also shows that economic progress translated to social progress, as both blacks and whites who lived in areas of black economic progress were more likely to: have friends of the opposite race; live in mixed-race neighborhoods; and favor integration.

 

Getting from casualties to economics

To connect WWII casualties to black economic opportunity, Ferrara begins by linking data on WWII enlistment with data on casualties. This enables Ferrara to measure a casualty’s former residence and occupation. He then links each casualty to county-level Census data, which provides Ferrara with a way of measuring African American economic outcomes.

The challenge for Ferrara is that the period he’s studying coincides with many major events. For example, the end of WWII, new anti-discriminatory labor laws, and major migration of Americans across states were all occurring at the same time. This makes it difficult to isolate the effect of WWII casualties and claim that these casualties – and not a simultaneous factor – were responsible for black economic progress.

To overcome this challenge, Ferrara uses differences in the number of WWII casualties across counties. To see how this works, consider a 1940s comparison between Allegheny and Westmoreland counties. After WWII, both counties are influenced by the same major factors: soldiers returning home, the policies of the New Deal, the economic conditions of the 1940s, etc. Therefore, a comparison of the two counties holds these major factors constant.

Now suppose that the only difference between the two counties during this period is that Allegheny County suffered more casualties during WWII than Westmoreland County. If this is the only difference between the two counties then any difference in economic outcomes across the two can be attributed to their difference in casualties. That’s the intuition for Ferrara’s approach.

Ferrara applies this approach to 1,400 southern counties. He finds that counties with a higher share of WWII casualties saw significantly more economic progress for their black residents in the 1940s and 1950s. In all, Ferrara finds that the effect of WWII casualties was enough to increase the overall share of blacks working in semi-skilled occupations by ten percentage points during the 1940s.

Ferrara then shows that black occupational-upgrading translated to an upgrade in social standing. Using survey data from Southern counties, Ferrara shows that casualties – through their effect on blacks’ labor market conditions – lead to more progressive views on race. In counties which experienced a larger number of casualties, both blacks and whites surveyed were significantly more likely to have an interracial friendship, to live in mixed-race areas, and to favor integration.

 

“I love interacting with my colleagues”

While Ferrara is originally from Berlin, Germany, his studies have taken him to Scotland, Italy, and, most recently, England, where he received his PhD from the University of Warwick in 2019. His research looks at labor market discrimination, using unique episodes in history to study the issue in ways that modern data doesn’t allow for.

“In a historic setting you can exploit unforeseen events that generate interesting variation in data,” says Ferrara, who wrote his PhD dissertation on the labor market effects of war causalities. “Understanding discrimination is especially topical now, with politicians around the world arguing against diversity and immigration. The lesson from my WWII paper is that providing equal opportunities can lead to better outcomes for everyone.”

Although he’s been at Pitt for just eight months, Ferrara raves about the economics department’s workplace environment and its location.                                            

“What excited me about the econ department at Pitt is its collegiate environment,” says Ferrara. “I love interacting with my colleagues. And Pittsburgh is a wonderful city; among the places I’ve lived it’s my favorite by far. It’s just the perfect size, it has an exciting history, and the quality of life is amazing.”