Does City Structure Affect the Labor Market Outcomes of Black Workers?

Selod, Harris; Zenou, Yves

doi:10.2139/ssrn.473585

Download This Paper

Open PDF in Browser

Add Paper to My Library

Does City Structure Affect the Labor Market Outcomes of Black Workers?

40 Pages Posted: 4 Dec 2003

See all articles by Harris Selod

Harris Selod

National Institute for Agricultural Research (INRA); National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); The World Bank; Paris School of Economics (PSE); World Bank - Development Research Group (DECRG)

Yves Zenou

Stockholm University; Monash University - Department of Economics; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Date Written: November 2003

Abstract

In this paper, location choices are driven by households (both blacks and whites) consciously choosing to trade off proximity to neighbors of similar racial backgrounds for proximity to jobs. Because of coordination failures in the location choices, multiple urban equilibria emerge. There is a 'Spatial-Mismatch Equilibrium' in which blacks reside far away from jobs and experience high unemployment rates and a 'Spatial-Matching Equilibrium' in which blacks are closer to jobs and experience lower unemployment rates. Under some reasonable condition, we demonstrate that all workers are better off under the Spatial-Matching Equilibrium, leaving a role for policy intervention.

Keywords: spatial mismatch, multiple equilibria, racial preferences, social networks, labor discrimination

JEL Classification: J15, R14

Suggested Citation: Suggested Citation

Selod, Harris and Zenou, Yves and Zenou, Yves, Does City Structure Affect the Labor Market Outcomes of Black Workers? (November 2003). Available at SSRN: https://ssrn.com/abstract=473585 or http://dx.doi.org/10.2139/ssrn.473585