The Costs of Employment Segregation: Evidence from the Federal Government under Wilson
We link personnel records of the federal civil service to census data for 1907-1921 to study the segregation of the civil service by race under President Woodrow Wilson. Using a difference-in-differences design to compare the black-white wage gap around Wilson's presidential transition, we find that the introduction of employment segregation increased the black wage penalty by 7 percentage points. This gap increases over time and is driven by a reallocation of already-serving black civil servants to lower paid positions. Our results thus document significant costs borne by minorities during a unique episode of state-sanctioned discrimination.
We thank Junxi Liu and John Friedman for excellent research assistance. We also thank the UC Berkeley Institute for Research on Labor and Employment (IRLE) and the Hellman Foundation for generously providing financial assistance needed for data collection. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.