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Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets

Author(s):Boustan, Leah Platt
Reviewer(s):Bodenhorn, Howard

Published by EH.Net (April 2017)

Leah Platt Boustan, Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets. Princeton: Princeton University Press, 2017.  xv +197 pp. $30 (hardcover), ISBN: 978-0-691-15087-1.

Reviewed for EH.Net by Howard Bodenhorn, Department of Economics, Clemson University.

The principal, big-picture issue addressed in In Competition in the Promised Land is how the migration of southern African-Americans into northern and western cities transformed labor and housing markets in mid-twentieth-century urban America. There is an already extensive, high-quality literature and Leah Platt Boustan offers several original and valuable insights and extensions. Before discussing Boustan’s contributions it is useful to summarize what economic historians know about these issues. Using the 1940 and 1950 censuses, Thomas N. Maloney (1994) and Robert A. Margo (1995) decompose the black-white wage gap to better understand the observed convergence in wages and attribute the convergence to a combination of wage compression within occupations and industries, as well as an occupational, industrial, and geographic redistribution of the black labor force during the war and post-war years. Their findings are consistent with Gunnar Myrdahl’s (1944) belief that the racial gap in occupations and wages would be reduced, at least in part, by blacks moving to the North with its better employment opportunities and less discriminatory regime. William J. Collins (2000) uses individual work histories to recreate the industrial and geographic transitions for blacks in the 1940s and finds little evidence in support of the traditional “southern farm to northern factory” tale. He also documents a modest wage gap in northern employment between southern-born black migrants and northern-born blacks residing in the same city. Maloney (2001) and Collins and Marianne H. Wanamaker (2014) use linked census data to study the first wave of the Great Migration that commenced in the 1910s. Maloney finds that migrant and native-born northern blacks experienced similar rates of occupational mobility in the 1910s. Collins and Wanamaker (2014, p. 220) find that black migrants increased their wages by 90 percent and that “blacks’ relative gains may be accounted for fully by their interregional migration.” Based on the black experience in the early decades of the twentieth century, Myrdahl’s belief was not unfounded. Disfranchised and unable to influence their condition through “voice” in the Jim Crow South, it appears that southern African-Americans might improve their lot through “exit” (Hirschman 1970).

It turns out that young black men who followed Myrdahl’s exhortation to “go North” in the post-depression decades experienced slightly higher wage gains than those of the First World War-era migrants (130 percent). South-to-North white migrants, by comparison, experienced 60 percent increase in wages on average. Boustan’s readable volume reveals that despite the substantial improvements in wages due to migration, black migrants did not follow the trajectory of other immigrant groups into northern and western cities. Unlike the Irish, Germans, and Italians before them, blacks did not integrate into urban economies and continue to move up the occupational ladder.

Boustan notes that the traditional explanation for the failure of African-Americans to achieve socioeconomic parity with whites emphasizes two factors: post-1970s deindustrialization, and racism. The relatively high-paying, if grueling, urban factory jobs available to blacks in the North earlier in the twentieth century vanished. The meatpacking industry, once concentrated in Chicago dispersed after 1960; the Chicago stockyards closed in 1970. Detroit, too, where Ford’s workforce was once 50 percent African-American, entered into a period of slow decline in the 1970s (Maloney and Whatley 1995; Glaeser 2011). Other rust-belt cities followed similar trajectories.

Boustan adds a supply-side factor to the mix of explanations. The continuing influx of southern black migrants into northern and western cities, intensified competition in already tight urban labor and housing markets. Migrants, she points out, pushed up housing costs, pushed down wages, crowded more youth into already overcrowded, underfunded urban schools, all while whites fled to the suburbs. An increasing number of whites also simply fled the North altogether; the falling costs of central air conditioning and the elimination of Jim Crow made the Sunbelt a more attractive place to live and work (Wright 2013). In the five substantive chapters of her book, Boustan investigates the causes and consequences of black migration into the urban North and white migration out.

The first chapter analyzes black migration out of the South. Here, and throughout the volume, she offers a brief depiction of the traditional interpretation and then, rather than trying to overturn those interpretations, she offers extensions and subtleties. The traditional explanation for black exit from the South, for example, focuses on violence, racism, and large exogenous events, such as the great Mississippi flood of 1927. While not denying that these factors were important, she contends that economic conditions were quantitatively more important determinants of the choice to leave and that existing transportation networks determined where blacks went. Southern areas more reliant on cotton cultivation and with more segregationist institutions experienced greater black migration, while areas in the South that offered industrial employment opportunities experienced less migration. A more interesting feature, however, was how railroad networks influenced where blacks went when they left the South. Blacks tended to move “due North,” because the principal rail lines did (p. 32). Blacks from the Mississippi delta, for example, tended to end up in Chicago; those from the Carolinas settled in Philadelphia, Newark, and New York.

Chapter 2 considers who migrated. She finds that sons of common laborers and sons of the small class of southern white-collar blacks were the most likely to leave. Sons of tenant farmers were less likely to migrate. Any economic analysis of the subsequent employment and earnings of black migrants must confront the issue of selection bias. Was it the case that blacks with more gumption were more likely to leave? To eliminate the effects of selection, she gathers and analyzes data on brothers, at least one of whom migrated and at least one of whom did not. This identification strategy will correct for any bias that results from common household factors, except, of course, differences in unobservable gumption across siblings. Because she finds relatively small differences in the return to migration between the overall (unmatched) and brother sample, Boustan concludes that selection is not driving the result. She then makes an effort to show that the gumption effect itself is fairly small, by comparing the earnings of northern-born and migrant blacks. Assuming that the northern-born sample exhibits the full distribution of characteristics, the trivial difference in earnings points to absence of selection on unobserved characteristics.

The book’s third chapter analyzes black employment and wages, and Boustan’s results are consistent with earlier studies (Donohue and Heckman 1991; Sundstrom 1994). Discriminatory hiring practices prevented northern-born blacks from moving out of traditionally black employments and southern immigrants pushed blacks’ relative wages down. Racial segmentation in the job market followed from both pre-market (education, training, experience) factors and market-based discrimination (employers’ refusals to hire blacks into supervisory, sales and clerical roles). Boustan’s estimates imply that pre-market factors account for about two-thirds of the imperfect substitutability of black for white workers. Lower-quality southern schools left many blacks ill-prepared for skilled and semi-skilled urban employments. “Discrimination,” concludes Boustan (p. 81), “originated not at the northern factory gate but in the southern schoolhouse; by the time southern blacks arrived in the North, they were already at a disadvantage.”

I find the fourth and fifth chapters, which document and explain white flight to the suburbs, the most fascinating and compelling section of the book. Black migration into urban areas may have encouraged white flight through three channels: the housing market channel; the social interactions channel; and the fiscal channel. The housing market channel signifies that the influx of southern blacks drove up rents and home prices, which made the suburbs cost competitive (home prices versus commuting costs). The social interactions channel posits that whites preferred not to live in close proximity to blacks, and there is a now large theoretical literature on tipping points consistent with the hypothesis that consumers prefer to reside in proximity to like persons, and considerable empirical evidence consistent with theory (Schelling 1971; Blair 2016). The fiscal channel posits that the increasing share of blacks in an urban area alters the political coalitions and local government spending priorities.

The empirical problem is sorting out the relative contribution of these three effects. Boustan offers two relatively ingenious approaches. She first tackles the social interactions channel. She adopts an instrumental variables (IV) approach based on the observed patterns of chain migration between southern and northern locales. Chicago, for example, historically attracted southern migrants from the lower Mississippi valley. Some may have been pulled by high wages in Chicago, while others were pushed by low wages in the delta. At the same time, urban, white Chicagoans may have been pulled to the suburbs by high wages in Arlington Heights or Evanston, or they may have been pushed by a distaste for living next to black migrants. Boustan’s identification strategy is premised on the idea that low wages in the delta should not have any effect on whites’ decisions to move to the suburbs except through the connection between low southern wages and black migration in historically white areas. Her IV estimates imply that each black migrant into the urban North is associated with 2.5 suburb-bound whites. A rate greater than 1.0 implies a white distaste for black neighbors. Still, she cannot yet conclude that whites exited due to a distaste for proximity or whether they had different preferences for local public goods.

To distinguish between prejudice and public goods, or the interactions versus fiscal channels, Boustan employs what are essentially within-metropolitan area, cross-border effects to identify the motivations for white flight. If black migration shifted the political balance and fiscal priorities of city governments, even whites residing in all-white enclaves may have headed for the exit. Although white families could probably maintain control of local elementary and middle schools, for example, they may not have been willing to send their teenagers to economically and racially diverse high schools. It is also possible that black and white neighborhoods differed in their preferences for public safety and other municipally supplied public goods. The evidence pretty clearly demonstrates increasing segregation: in 1940, 21 percent of whites lived within two miles of a black enclave; in 2000, just 13 percent of whites did. But she finds that much of that change is due to local political and fiscal factors. When comparing two comparable, adjacent neighborhoods separated by an urban-suburban political border, she finds that housing prices are significantly higher to the white side and lower to the black. Whites are willing to pay more for housing to reside on the white side; the wider the gap in black population share between city and suburb, the larger the housing price differential. But the motivating factor appears to be differences in mean income across the border rather than race per se. Different incomes also lead to different fiscal choices. While suburbanites do not spend more per pupil on education or on parks, sanitation or road maintenance, they spend less on public safety perhaps because they face fewer social problems and they pay less in taxes (p. 140). Suburbanites also live around more college graduates, a valuable amenity if peer effects influence current and future labor productivity and wages.

Some readers might, and perhaps should, question some of Boustan’s approaches and conclusions, yet her volume is a thoughtful and valuable contribution to the economic literature on race relations and social interactions. While reading her analysis of brothers’ outcomes, I could not help but reflect on the casual observation that I have known lots of brothers that were different in so many dimensions that a household fixed effect will not capture. Still it is a methodological advance in accounting for potential selection of movers and stayers. And in her analysis of white and black enclaves, I kept asking whether two miles, or even four, represents a meaningful distance when automobiles are ubiquitous. I attended high school in a suburban Virginia town in which the high school was about 60 percent white and lived about two miles from a black enclave, separated by a four-lane divided highway. I had virtually no interaction with black students during school hours, but lots of interaction after school on the outdoor basketball courts across the highway. Was that what my parents were paying for? And how can Boustan account for it? I look forward to seeing her answers to these and other questions as she continues to grapple with these kinds of difficult questions.

References:

Blair, Peter Q. 2016. “The Effect of Outside Options on Tipping Points.” Working paper, Clemson University.

Collins, William J. 2000. “African-American Economic Mobility in the 1940s: A Portrait from the Palmer Surveys,” Journal of Economic History 60(3): 756-781.

Collins, William J. and Marianne H. Wanamaker. 2014. “Selection and Economic Gains in the Great Migration of African Americans: New Evidence from Linked Census Data,” American Economic Review: Applied Economics 6(1): 220-252.

Donohue, John J. III and James Heckman. 1991. “Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks,” Journal of Economic Literature 29(4): 1603-43.

Glaeser, Edward. 2011. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. New York: Penguin.

Hirschman, Albert O. 1970. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge: Harvard University Press.

Maloney, Thomas N. 1994. “Wage Compression and Wage Inequality between Black and White Males in the United States, 1940-1960,” Journal of Economic History 54(2): 358-81.

Maloney, Thomas N. 2001. “Migration and Economic Opportunity in the 1910s: New Evidence on African-American Occupational Mobility in the North,” Explorations in Economic History 38(): 147-65.

Maloney, Thomas N., and Warren C. Whatley. “Making the Effort: The Contours of Racial Discrimination in Detroit’s Labor Markets, 1920–1940,” Journal of Economic History 55(3): 465-493.

Margo, Robert A. 1995. “Explaining Black-White Wage Convergence, 1940-1950,” Industrial and Labor Relations Review 48(3): 470-81.

Myrdahl, Gunnar. 1944. An American Dilemma: The Negro Problem and Modern Democracy. New York: Harper & Brothers.

Schelling, Thomas C. 1971. “Dynamic Models of Segregation,” Journal of Mathematical Sociology 1(2): 143-186.

Sundstrom, William A., 1994. “The Color Line: Racial Norms and Discrimination in Urban Labor Markets, 1910–1950,” Journal of Economic History 54(2): 382-396.

Howard Bodenhorn is a professor of economics at Clemson University. He is author of The Color Factor: The Economics of African-American Well-being in the Nineteenth-Century South (Oxford University Press, 2015).

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Subject(s):Education and Human Resource Development
Historical Demography, including Migration
Household, Family and Consumer History
Labor and Employment History
Urban and Regional History
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII