LAST HIRED, FIRST FIRED? BLACK-WHITE UNEMPLOYMENT AND THE BUSINESS CYCLE

Studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because cycli...

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Bibliographic Details
Published in:Demography 2010-02, Vol.47 (1), p.227-247
Main Authors: COUCH, KENNETH A., FAIRLIE, ROBERT
Format: Article
Language:English
Subjects:
Adult
African Americans
Black or African American - statistics & numerical data
Black people
Black white relations
Blacks
Business Cycles
Business management
Business studies
Demographic aspects
Demographic research
Demographics
Demography
Economic conditions
Economic Crises
Economic fluctuations
Economic growth
Economic Recession
Employment
Employment statistics
Employment termination
Ethnicity
Firings
Geography
Hiring
Humans
Labor market
Labor markets
Male
Medicine/Public Health
Middle Aged
Personnel Downsizing - economics
Personnel Downsizing - statistics & numerical data
Personnel management
Personnel Selection - economics
Personnel Selection - statistics & numerical data
Population Economics
Race
Race Relations
Recessions
Regression Analysis
Skin colour
Social aspects
Social Sciences
Sociology
Studies
Unemployment
Unemployment - statistics & numerical data
Unemployment - trends
Unemployment rates
United States
White People - statistics & numerical data
Workforce
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Summary:Studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because cyclical movements in the underlying transitions into and out of unemployment are not examined. Using Current Population Survey data matched across adjacent months from 1989–2004, this article provides the first detailed examination of labor market transitions for prime-age black and white men to test the last hired, first fired hypothesis. Considerable evidence is presented that blacks are the first fired as the business cycle weakens. However, no evidence is found that blacks are the last hired. Instead, blacks appear to be initially hired from the ranks of the unemployed early in the business cycle and later are drawn from nonparticipation. The narrowing of the racial unemployment gap near the peak of the business cycle is driven by a reduction in the rate of job loss for blacks rather than increases in hiring.
ISSN:0070-3370
1533-7790
DOI:10.1353/dem.0.0086