Why do small establishments hire fewer blacks than large ones?

This paper shows that small establishments are much less likely to hire and employ blacks than are larger establishments. A number of possible explana tions for this result are considered, such as differences across establishm ents in application rates from blacks, skill needs, locations, and recruiti ng behavior. Although these factors can account for some of the observed di fferences in race of new hires between small and large establishments, much remains unexplained. The results suggest that discrimination in hiring may be much more pervasive at smaller establishments than larger ones.