Firm Turnover and the Return of Racial Establishment Segregation

John-Paul  Ferguson; Rembrand  Koning

Article | American Sociological Review | June 2018

Firm Turnover and the Return of Racial Establishment Segregation

by John-Paul Ferguson and Rembrand Koning

Abstract

Racial segregation between American workplaces is greater today than it was a generation ago. This increase has happened alongside the declines in within-establishment occupational segregation on which most prior research has focused. We examine more than 40 years of longitudinal data on the racial employment composition of every large private-sector workplace in the United States to calculate between-establishment and within-establishment trends in racial employment segregation over time. We demonstrate that the return of racial establishment segregation owes little to within-establishment processes but rather stems from differences in the turnover rates of more- and less-homogeneous workplaces. Present research on employment segregation focuses intently on within-firm processes. By doing so, we may be overstating what progress has been made on employment integration and ignoring other avenues of intervention that may give greater leverage for further integrating firms.

Keywords: diversity; firm entry; stratification; segregration; entrepreneurship; Business Ventures; Employees; Diversity; Race; Segmentation; United States;

Format: Print

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Citation:

Ferguson, John-Paul, and Rembrand Koning. "Firm Turnover and the Return of Racial Establishment Segregation." American Sociological Review 83, no. 3 (June 2018): 445–474.

Racial employment segregation between large workplaces in America has grown over the last generation. We know little about how changes in patterns of employment by economic sector have contributed to this growth, though. While there are many stylized narratives about how industrial change may have affected employment segregation, there are fewer testable predictions or ways to reconcile those narratives. We argue that Theil's information statistic provides a way to compare changes within and between industries or other sub-groups in a common framework. Changes in Theil's H can be decomposed into changes in relative size, relative diversity, and relative segregation, which are precisely the mechanisms on which most stylized narratives rely. We explain permutation-test methods for summarizing changes in these factors across six major economic sectors over time. We test these methods using four decades of longitudinal data on establishment workforce composition from the Equal Employment Opportunity Commission.

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Firm Turnover and the Return of Racial Establishment Segregation

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