In their 2020 paper “The Persistent Effects of Decreasing Labor-Market Discrimination: Evidence from WWII policies,” PSTC economist Anna Aizer and co-authors Ryan Boone, Adriana Lleras-Muney, and Jonathan Vogel explore how changes in World War II domestic production policies helped facilitate long-term financial and educational gains for Black Americans. 

“The 1940s and the 1960s were the two periods with the greatest gains in terms of economic outcomes of Black families, raising the question of what happened during these two periods that would result in such gains,” says Professor Aizer. 

With support from the PSTC, the California Center for Population Research at UCLA, and the Eunice Kennedy Shriver National Institute of Child Health and Human Development, Aizer and her colleagues sought to better understand these contemporary shifts in the racial wage gap by examining U.S. Census Data from 1920-1970. 

Using a quantitative model, Aizer and her colleagues uncovered a causal connection between Black workers’ economic gains and the increased number of government production contracts extended to private firms throughout the World War II era. Specifically, driven by the heightened demand for labor and federal nondiscrimination requirements, these government production contracts led to the increased hiring of minority workers to skilled occupational roles. The resulting economic benefits had a lasting, multi-generational impact. 

In addition to demonstrating the link between racial discrimination and disparate labor outcomes, the researchers’ findings also revealed new insights into the link between parental income level and educational attainment: Not only did the financial gains incurred by Black workers persist until at least 1970, but their children’s education levels also increased as a result of their parents’ improved labor market outcomes. 

“Policy makers often think the key to closing the racial wage gap is to close the racial schooling gap,” says Professor Aizer. “But the results of this study suggest that the opposite is also true—to close the racial education gap, we could reduce the racial earnings gap of parents.”

_{*Photo courtesy of U.S. Military Archives}