Are black workers missing the connection? The effect of spatial distance and employee referrals on interfirm racial segregation

I use data on the hiring practices and spatial location of firms in four cities to model the pro-cess of interfirm racial segregation. When I control for the spatial location of the firm, the use of employee referrals reduced the probability of hiring a black worker by 75 % in firms that are less than 10 % black. Among all firms, the results suggest that employee referrals are just as important as the geographic location of the firm in generating employment segregation: both increase the pre-dicted level of interfirm racial segregation among blue-collar workers in the cities studied by about 10%. espite declines over the past two decades, the level of black-white residential segrega-tion remains high in large urban areas in the United States (Cutler, Glaeser, and Vigdor 1999; Glaeser and Vigdor 2001). In addition, this residential segregation seems to be par-alleled by an equally high degree of racial social segregation most blacks and whites in America have friends of the same, rather than a different, race (Jackman and Crane 1986). The question posed in this article is whether high levels of residential and friendship seg-regation result in the employment segregation of black and white workers. Although the level of interfirm racial segregation has been documented using nation