To estimate employment-population ratios for black and white men with an adjustment for incarceration—a factor overlooked by most research on employment inequality—the authors combine data from surveys of prisons and jails with data from the Current Population Survey. This adjustment significantly reduces estimated employment rates for African Americans, young workers, and young high school dropouts. The authors find that employment among young black male high school dropouts steadily declined between 1982 and 1996 despite periods of very low unemployment in the labor market as a whole. Standard labor force data, which include no incarceration data, understate black-white inequality in employment among young dropouts by about 45%.
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