Working Papers
Abstract:
White teenagers are substantially more likely to search for employment
than their black counterparts. This occurs despite the fact that conditional
on race individuals who come from poorer families are more likely to search
and black teenagers come from poorer families. While differences in wages
between white and black teenagers are small, the unemployment rate for
black teenagers is over twice that of white teenagers. We develop a general
equilibrium search model where firms are partially able to target their
search based upon demographics. Differences in the labor market explain
half of the gap in the search rates between black and white teenagers.
Removing search targeting substantially closes the gap between black and
white unemployment rates.