Declining Employment among Young Black Less-Educated Men: The Role of Incarceration and Child Support

Declining Employment among Young Black Less-Educated Men: The Role of Incarceration and Child Support Harry J. Holzer Georgetown Univ. Urban Institute Paul Offner Urban Institute Elaine Sorensen Urban Institute April 2004 We are grateful to the Charles Stewart Mott Foundation for their financial support of this project. We thank Julie Fritts, Kate Pomper, Melissa Powell, and Jorge Ugaz for outstanding research assistance. We also thank Steven Levitt and Kevin Reitz for providing us their data on prison overcrowding lawsuits and sentencing reforms across states respectively; and we thank Irwin Garfinkel, Peter Gottschalk, Lauren Rich, and seminar participants at the APPAM meetings (2003) and the Kennedy School summer workshop on Inequality for helpful comments. Our coauthor Paul Offner passed away on April 20, 2004. Abstract In this paper, we document the continuing decline in employment and labor force participation of black men between the ages of 16 and 34 who have a high school education or less. We explore the extent to which these trends can be accounted for in recent years by two fairly new developments: (1) The dramatic growth in the number of young black men who have been incarcerated; and (2) Strengthened enforcement of child support policies. We use micro-level data from the Current Population Survey Outgoing Rotation Groups (CPS-ORG), along with state-level data over time on incarceration rates and child support enforcement, to test these hypotheses. Our results indicate that post-incarceration effects and child support policies both contribute to the decline in employment activity among young black less-educated men in the past two decades, especially among those age 25–34. 1 I. Introduction During the 1990s, employment rates among young and less-educated minority women—particularly African-Americans—increased quite dramatically. This increase is generally attributed to a combination of welfare reform policies, expansions of the Earned Income Tax Credit (EITC) and other supports for working poor families, as well as a very robust labor market during that time period (Meyer and Rosenbaum 2001; Blank 2003). In contrast, the employment rates of young less-educated black men continued their long secular decline during this time period. Though young less-educated black men did benefit from the economic boom of the 1990s, and the wages of those in the labor force seemed to rise in this period, the boom was not sufficient to offset the negative secular trend that has been reducing employment and labor force activity among these young men for the past several decades Furthermore, there has been little good evidence to date about why this trend has continued in the 1990s, despite positive trends in educational attainment and reductions in criminal activity for this group.1In this paper, we explore the effects on the labor force activity of young less-educated black men from two relatively recent developments: (1) The dramatic rise in the share of young black men who have bee