Do Race and Ethnicity Determine Employment in Certain Occupations? A VECM Approach

The social sciences literature is replete with microeconomic models on racial discrimination of minority employment. This paper contributes to the empirics by testing the hypothesis of short run and long run employment relationships among racial groups in the U.S. labor market. The author employs a VECM model using national quarterly BLS data for years 2000 to 2023 to test for short-run and long-run Granger causality between employment among racial groups in 5 broad occupational categories: management and professional; services; sales and office; natural resources, construction, and maintenance; and production, transportation, and material moving.The results overwhelmingly reject the hypothesis of independence in employment among the racial groups. Among other findings, there is evidence to suggest that employment of African Americans in the natural resources, construction, and maintenance occupations Granger cause employment in the White and Latino communities in the short run. This short run burst of African American employment in these occupations may be a sign of forthcoming economic downturn. In this same group of occupations, Latin employment Granger causes Asian and White employment, while Asian employment Granger causes White and Latin employment. GDP and these racial groups Granger cause White and Latin employment in the long run.