What Explains Race/Ethnic Inequality in Job Quality in the Service Sector?

Authors:

Adam Storer, University of California, Berkeley
Daniel Schneider, University of California, Berkeley
Kristen Harknett, University of California, San Francisco

Abstract:

White workers experience significant advantages in the labor market both in hiring and in compensation compared to their non-white peers. Human capital differences and occupational segregation are commonly offered as partial explanations for these racial inequalities. To further explain the gap, some scholars have pointed toward firm and intra-organizational dynamics, yet such inquires have been constrained by a lack of suitable data. The lack of data has also precluded an examination of key aspects of job quality beyond wages and benefits, in particular exposure to precarious scheduling practices. We draw on innovative matched employer-employee data from The Shift Project to estimate race/ethnic gaps in these temporal dimensions of job quality and examine the contribution of firm-level sorting and intra-organizational dynamics to these gaps. Results from regression and decomposition analyses show significant race/ethnic gaps in exposure to precarious scheduling that disadvantage non-white workers. Going beyond standard explanations such as human capital differences, we provide novel evidence that both firm segregation and racial discordance between workers and managers play significant roles in explaining race/ethnic gaps in job quality, though a portion of the gap remains unexplained. Notably, we find that race/ethnic gaps are larger but more explicable for women than for men.