Student Research in Economics: 1990-91

Mark Israel did his honors research with Dr. Michael Seeborg, looking Toward a More Comprehensive Explanation of Declining Black Male Youth Employment.

ABSTRACT: Over the last twenty years, the employment to population ratio of black male youths has been declining rapidly, while that of other youth groups has been relatively stable. Many potential causes of this situation have been advanced, but no consensus has been researched. This paper attempts to combine several of these seemingly conflicting explanations into a comprehensive explanation of falling black male youth employment. The potential causes to be considered are: declining manufacturing, increasing returns from crime, generosity of the welfare system, falling educational attainment, the minimum wage, and the development of an urban "underclass." These are combined into an overall theoretical framework in which declining manufacturing and increases in welfare and crime lower one's net wage from work and raise one's reservation wage. This leads immediately to decreased participation in the labor force, and over time to reduced incentive to attend school and the formation of underclasses which stress dysfunctional behavior over employment or schooling. The minimum wage is included as an additional factor affecting employment outside of this basic framework; ceteris paribus, a higher minimum wage should lead to lower youth employment.

To test this theoretical framework, a two stage regression model is used. In the first stage, the employment to population ratio is regressed against all potential causes; in the second, underclass formation and declining educational attainment are regressed against manufacturing, welfare and crime to show an indirect of these three variables over time through underclass formation and declining educational attainment. All data for this is taken from Census publications, FBI Uniform Crime Reports, and Department of Health and Human Services publications from 1968 to 1987 and is aggregated across the nation. The basic findings of the paper are that declining manufacturing leads directly to lower black male employment relative to other groups, while returns to welfare and crime lead to indirectly to lower black male youth employment through underclass formation.

Kristin Jaeger did her independent research with Dr. Michael Seeborg, titled Daddy Doesn't Live Here Anymore: A Study of the Determinants of Female-Headed Minority Families.

ABSTRACT: The last three decades have seen a marked change in the structure of black families. In 1960, 72% of black women aged 15-44 had been married at least once; today that figure is only 48%. At the same time there has been an increase in the fraction of black children born to unmarried mothers from 23% to 60%. These facts are some of the first indications of an alarming trend toward more female-headed minority families, a trend which seems to be less distinct in the white population.

This study will use both a literature review and an empirical analysis to examine the economic determinants of family structure in metropolitan areas. The focus will be on those factors which may cause high incidences of female-headed minority families in certain cities. Factors to be examined include the Marriageable Male Pool Index (the number of men employed per 100 women) as developed by Wilson and Neckerman, unemployment rates, level of welfare support available, and industrial structure. Special attention will also be given to the effect of family structure on family income.

The cross-sectional model proposed will use data from the 1980 Census for approximately 100 selected metropolitan areas. The primary method of analysis to be used to test hypotheses concerning the determinants of change was multiple regression. The results of these analyses will be presented.