UNDEREMPLOYMENT AND RACIAL COMPETITION IN LOCAL-LABOR MARKETS

The primary concern in this paper is to analyze the effects of black p opulation concentration on black and white men's relative and absolute underemployment levels in labor market areas while controlling for th e degree of occupational segregation by race. We draw hypotheses from two primary bodies of research; one literature focuses on general raci al competition and the other considers competition to be more limited. Our findings that racial inequality in underemployment levels increas es with blacks' population share are most consistent with the general competition model. However, we also find some support for the limited competition model which holds that not all whites benefit from increas ed competition with blacks. Finally, we find that occupational segrega tion helps to determine the form that racial discrimination in employm ent adequacy takes. Where occupational segregation is high, black men hold relatively more low-wage jobs, but where occupational segregation is low, they experience higher levels of unemployment and more disadv antage relative to whites.