Volume 6, Number 3 (Summer) 1971
Bell, Jr., Duran. 1971. "Bonuses, Quotas, and the Employment of Black Workers." Journal of Human Resources 6(3):309-320.
The purpose of this study is to compare the consequences for employers and black workers of racial quotes, as opposed to bonus (training grant) systems. The author found the quota system preferable to the simple bonus system on the grounds that the bonus tended to reward firms for having poor pre-bonus ethnic ratios and provided the opportunity for profiteering on the part of racist employers; whereas the quota system benefited black workers without paying tribute to racism. A "modified" bonus system was devised which incorporated the advantages of both quota and bonus with few of the disadvantages of either. An examination of the "modified" bonus system with respect to (a) its effect upon black wage rates and (b) the consequences of the "raiding" of blacks from one firm by another gave rise to a final minor modification in the recommended bonus system.
The author is Research Associate, the Brookings Institution, and Associate Professor of Economics, University of California, Irvine. An earlier version of this paper was read before the American Economic Association, December 1970. An even earlier version was presented to the 1970 Workshop, Caucus of Black Economists. The author is indebted to a number of persons who made valuable comments, especially John Handy, Charles L. Schultze, and Marcus Alexis, and to the Ford Foundation which financed the Workshop.
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