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Car ownership and the labor market of ethnic minorities

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  • Gautier, Pieter A.
  • Zenou, Yves

Abstract

We show how initial wealth differences between low-skilled minorities and white workers can generate differences in their labor-market outcomes. This even occurs in the absence of a taste for discrimination against ethnic minorities or exogenous differences in distance to jobs. Because of the initial wealth difference, minorities cannot afford to buy a car while whites can. Car ownership allows whites to reach more jobs per unit of time, which gives them a better bargaining position in the labor market. As a result, in equilibrium, ethnic minorities end up with both higher unemployment rates and lower wages than whites. Furthermore, we also show that it takes more time for minorities to reach their jobs even though they travel less miles when employed. Those predictions are consistent with the data. Better access to capital markets or better public transportation will reduce the differences in labor-market outcomes.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 67 (2010)
Issue (Month): 3 (May)
Pages: 392-403

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Handle: RePEc:eee:juecon:v:67:y:2010:i:3:p:392-403

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Transportation mismatch Job search Spatial labor markets Multiple job centers Ethnic minorities;

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References

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Citations

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Cited by:
  1. Peter Rupert, Elena Stancanelli, Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," THEMA Working Papers 2009-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  2. Zenou, Yves, 2009. "Search in cities," European Economic Review, Elsevier, vol. 53(6), pages 607-624, August.
  3. Olof Aslund & John Osth & Yves Zenou, 2009. "How Important is Access to Jobs? Old Question - Improved Answer," CReAM Discussion Paper Series 0925, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  4. Vincent Boitier, 2013. "Endogenous city size in urban search models: the case of high reallocation costs," ERSA conference papers ersa13p590, European Regional Science Association.
  5. Gobillon, Laurent & Rupert, Peter & Wasmer, Etienne, 2014. "Ethnic unemployment rates and frictional markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 108-120.
  6. Ellickson, Paul B. & Grieco, Paul L.E., 2013. "Wal-Mart and the geography of grocery retailing," Journal of Urban Economics, Elsevier, vol. 75(C), pages 1-14.
  7. repec:spo:wpecon:info:hdl:2441/10031 is not listed on IDEAS
  8. Rosa Sanchis-Guarner, 2012. "Driving Up Wages: The Effects of Road Construction in Great Britain," SERC Discussion Papers 0120, Spatial Economics Research Centre, LSE.
  9. Zenou, Yves, 2009. "Urban search models under high-relocation costs. Theory and application to spatial mismatch," Labour Economics, Elsevier, vol. 16(5), pages 534-546, October.
  10. Yip, Chi Man, 2011. "Size and The City: Productivity, Match Quality and Wage Inequality," MPRA Paper 31255, University Library of Munich, Germany.
  11. Deokrye Baek, . "The Effect of Public Transportation Accessibility on Food Insecurity," Departmental Working Papers 2013-02, Department of Economics, Louisiana State University.

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