Seminar Summary – Public Opinion, Racial Bias and US Labor Market Outcomes

New York City, USA. Photo by Jordan Merrick via Unsplash.

Racism has a global historic root that has both been propagated in various forms. Often, people who propagate racism are situated in positions of power; their actions can therefore negatively impact vulnerable communities, which have suffered economically and socially by racial suppression. Historically, racism has also defined and dictated the socio-economic status of individuals, whether it is the African American community that was constrained by redlining in the United States or the Dalit community in India who were denied educational and employment rights.

Anti-minority rhetoric in political discourse can have substantial effects on the willingness of people to engage in xenophobic and racially-motivated actions. Indeed, rhetoric has been shown to affect behavior against minorities, as it facilitates expressions of anti-minority views and, in turn, can spur anti-minority actions. To date, however, evidence on the effect of negative shifts in public opinion on the economic lives of minorities is limited. How do public opinion and racial bias impact labor market outcomes in the United States?

Motivated to fill this gap, Silvia Prina, Associate Professor of Economics at Northeastern University, jointly with Kaveh Majlesi and Paul Sullivan, conducted research on post-pandemic employment and earnings outcomes of Asians in the US. In the first meeting of the Human Capital Initiative Fall 2023 Research Seminar Series on October 4, Prina presented findings to identify potential racial bias in the US labor market by investigating the impact of anti-Chinese rhetoric during the pandemic on labor market outcomes among Asians relative to other race groups. Prina and her coauthors compared the level of earnings and employment status of Asians before and after the pandemic and hypothesized that racial bias toward Asians would have a relatively larger adverse impact in sectors that require in-person interactions. Using data from the Current Population Survey (CPS), they documented changes in monthly employment of individuals. While they found that Asians were slightly more likely to be unemployed than Whites, consistent with their hypothesis, Asians working in jobs that required face-to-face interactions were more likely to be unemployed.

To determine whether these negative consequences in the labor market for Asians can be attributed to racial bias, the researchers analyzed presidential election data. They hypothesized that states that voted more favorably for former President Donald Trump would show stronger negative bias against Asians. Using data from the 2016 presidential elections, they found that the negative impact on Asians was strongest in the Republican quartile of states and the weakest in states that primarily voted Democratic. In line with the presidential data, Prina and colleagues consulted Nationscape to directly examine the changes in public opinion about Asians and other minorities. The data suggested that the share of non-Asians who held unfavorable views of Asians increased by 35 percent and negative views of Asians were much stronger among individuals who voted for Trump in 2016 and who watch Fox News.

In addition, the researchers also investigated how the increase in negative public opinion of Asians affected their earnings. Results from their study found that Asians working face-to-face jobs experienced a drop in their earnings by $7.50, or 8 percent of their median weekly earnings. To this end, Prina and colleagues’ research found that while all minorities performed poorly relative Whites in terms of employment and earnings, that Asians continued to be employed were more likely to see a significant drop in their earnings. Similar to employment, the negative effects on earnings were stronger in states that voted more favorably for Trump. Prina and coauthors also noted that these negative changes in opinion were more drastic for those who voted for Trump and reported watching Fox News.

In reflecting on her findings, Prina was careful to note that the labor market outcomes for Asians might have deteriorated because of employers, customers or both. Furthermore, she expressed a concern that the findings that they observe might be due to other unobservable factors that are correlated with job remoteness measures and that also differ by race or ethnicity. For example, if shelf stockers were more unlikely to be laid off than cashiers, and if more Asians tended to be cashiers, then that would likely bias their interpretation of the observed correlation between race and labor market outcomes. However, Prina also noted that the trends in unemployment over this period indicated that other minority groups, notably Blacks and Hispanics, did not experience the same level of changes to their employment status as Asians.

Taken together, evidence from this study contributes to a historically important genre of policy-relevant research on racism and its direct impact on the economic lives of minorities.

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