Discrimination and the Effects of Drug Testing on Black Employment

A common assumption is that the rise of drug testing among U.S. employers must have had negative consequences for black employment. I use variation in the timing and nature of drug testing regulation to identify the impacts of testing on black hiring. I find that adoption of protesting legislation increases black employment in the testing sector by 7% to 30% and relative wages by 1.4% to 13.0%, with the largest shifts among low-skilled black men. The results are consistent with ex ante discrimination and suggest that drug testing may benefit African Americans by enabling nonusing blacks to prove their status to employers.