The Persistent Effect of Temporary Affirmative Action

I estimate the dynamic effects of federal affirmative action regulation, exploiting variation in the timing of regulation and deregulation across work establishments. Affirmative action increases the black share of employees over time: in 5 years after an establishment is first regulated, the black share of employees increases by an average of 0.8 percentage points. Strikingly, the black share continues to grow at a similar pace even after an establishment is deregulated. I argue that this persistence is driven in part by affirmative action inducing employers to improve their methods for screening potential hires.