Deregulation and the racial composition of airlines

Economic theory suggests that the enhanced product market competition of de regulation reduces employers' ability to discriminate when hiring. Recent s tudies of the effect of deregulation on racial employment in the naturally competitive trucking industry find that deregulation increased minority emp loyment. This study examines the effect of deregulation on racial employmen t in the airline industry. Because deregulation transformed airlines from w asteful service competition to rigorous price competition, deregulation's e ffect on racial hiring in this continuously competitive industry is not app arent. This study finds that deregulation only modestly changed the racial composition of major airline occupations, which suggests that the change in market structure as a result of deregulation may largely determine the eff ect of regulatory reform on the racial composition of an industry. (C) 2001 by the Association for Public Policy Analysis and Management.