Differences in the earnings of black workers in the private and public sectors

Does public sector employment provide black workers with a special niche that shelters their earnings from the negative effect of segregation? A contextual analysis is performed to identify how characteristics of the local area labor market affect the earnings of black workers in the public and private sectors. The focus is on the influence of residential segregation, a structural factor that contributes to the disadvantaged position of blacks in the labor market. The results show that segregation negatively affects the earnings of blacks in the private sector but has no effect on the earnings of blacks in the public sector. These findings suggest that the public sector may shelter black workers from structural barriers to earnings attainment, thus providing blacks with a special niche in the economy.