Measuring the impact of set-aside programs on the minority business sector

Abstract

In addition to remedying discrimination, set-aside programs can play an important role in minority business development. While it is understood that set-aside programs have positive impacts on the minority business sector, the magnitude of these impacts has not been explored. This study is an econometric analysis of the economic impacts within the minority business sector that are attributable to City of Chicago spending with minority-owned firms. Where appropriate, and to better operate as business development tools, set-aside programs should target the emerging lines of minority enterprise, include Target Market Programs, and contain provisions for debundling large contracts.