Race-specific urban wage premia and the black-white wage gap

We establish a novel empirical fact about the black-white wage gap: looking both across and within metropolitan areas, increasing city size or employment density is associated with a larger black-white wage gap. The estimated effects represent between 9 and 18% of recent estimates of the black-white wage gap. Using a variety of techniques, we demonstrate that our within-city relationship is unlikely to be driven by racial differences in unobserved ability. Finally, we present evidence suggestive of a role for race-specific networks in explaining these differences in the black-white wage gap.