September 2022
Article
Administrative Science Quarterly

Regulatory Spillover and Workplace Racial Inequality

Format:Print
| Pages:35

Abstract

This paper suggests that affirmative action bans in the U.S. public sector may influence racial inequality in the private sector. Since the 1990s, nine states have banned affirmative action practice in public universities and state governments. Though these bans have no legal jurisdiction over private-sector firms, I theorize that they could influence such firms normatively. Executives who have been skeptical about EEO policies may feel more normatively licensed to reduce commitment to EEO practices after such a ban. Using a difference-in-differences estimation on 11,311 firms from 1985 to 2015, I find that the bans are indeed associated with slower racial progress in private sector firms: after a state adopts the affirmative action ban, growth in the proportion of Black managers in establishments with corporate headquarters in that state slows down by more than 50 percent and this slowdown is mostly concentrated in firms with politically conservative CEOs. These findings suggest a mechanism for the persistence of racial inequality and show that regulations can influence actors well beyond legal jurisdictions.