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City Structure, Job Search and Labour Discrimination. Theory and Policy Implications

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Author Info
Selod, Harris
Zenou, Yves

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Abstract

We consider a search-matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs. Location choices are mainly driven by the racial preferences of households. There are two possible urban equilibrium and, we show that, under some reasonable condition, all workers are better off in the equilibrium where blacks are close to jobs. We then consider two policies: affirmative action and employment subsidies to the firms that hire black workers. We show that, in cities where black workers reside far away from jobs, the optimal policy is to impose higher quotas or employment subsidies than in cities where they live close to jobs.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5009.

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Date of creation: Apr 2005
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Handle: RePEc:cpr:ceprdp:5009

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Related research
Keywords: affirmative action employment subsidies racial preferences social networks spatial mismatch

Other versions of this item:

Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns

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  2. Gobillon, Laurent & Selod, Harris & Zenou, Yves, 2003. "Spatial Mismatch: From the Hypothesis to the Theories," IZA Discussion Papers 693, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January. [Downloadable!] (restricted)
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  5. Topa, Giorgio, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 261-95, April.
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  6. Glenn C. Loury, 2000. "Social Exclusion and Ethnic Groups: The Challenge to Economics," Boston University - Institute for Economic Development 106, Boston University, Institute for Economic Development.
  7. Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May. [Downloadable!] (restricted)
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  10. Mortensen, Dale T. & Vishwanath, Tara, 1994. "Personal contacts and earnings : It is who you know!," Labour Economics, Elsevier, vol. 1(2), pages 187-201, March. [Downloadable!] (restricted)
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  13. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September. [Downloadable!] (restricted)
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  14. Battu, Harminder & Mwale, MacDonald & Zenou, Yves, 2003. "Do Oppositional Identities Reduce Employment for Ethnic Minorities?," CEPR Discussion Papers 3819, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  15. Antoni Calvo-Armengol & Matthew O. Jackson, 2002. "Social Networks in Determining Employment and Wages: Patterns, Dynamics, and Inequality," Microeconomics 0211007, EconWPA. [Downloadable!]
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  16. Ihlanfeldt, Keith R., 1997. "Information on the Spatial Distribution of Job Opportunities within Metropolitan Areas," Journal of Urban Economics, Elsevier, vol. 41(2), pages 218-242, March. [Downloadable!] (restricted)
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  18. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier. [Downloadable!] (restricted)
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  19. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination And Employment Outcomes For Minority Workers," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 835-867, August. [Downloadable!] (restricted)
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  20. Ihlanfeldt, Keith R. & Scafidi, Benjamin, 2002. "Black Self-Segregation as a Cause of Housing Segregation: Evidence from the Multi-City Study of Urban Inequality," Journal of Urban Economics, Elsevier, vol. 51(2), pages 366-390, March. [Downloadable!] (restricted)
  21. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May. [Downloadable!] (restricted)
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  23. Courant, Paul N. & Yinger, John, 1977. "On models of racial prejudice and urban residential structure," Journal of Urban Economics, Elsevier, vol. 4(3), pages 272-291, July. [Downloadable!] (restricted)
  24. Rogers, Cynthia L., 1997. "Job Search and Unemployment Duration: Implications for the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 42(1), pages 109-132, July. [Downloadable!] (restricted)
  25. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
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  26. Leonard, Jonathan S, 1990. "The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 47-63, Fall. [Downloadable!] (restricted)
  27. Holzer, Harry J. & Reaser, Jess, 2000. "Black Applicants, Black Employees, and Urban Labor Market Policy," Journal of Urban Economics, Elsevier, vol. 48(3), pages 365-387, November. [Downloadable!] (restricted)
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  28. Wahba, Jackline & Zenou, Yves, 2005. "Density, social networks and job search methods: Theory and application to Egypt," Journal of Development Economics, Elsevier, vol. 78(2), pages 443-473, December. [Downloadable!] (restricted)
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  29. David Austen-Smith & Roland G. Fryer, 2003. "The Economics of 'Acting White'," NBER Working Papers 9904, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  30. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-52, June. [Downloadable!] (restricted)
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  31. Yinger, John, 1976. "Racial prejudice and racial residential segregation in an urban model," Journal of Urban Economics, Elsevier, vol. 3(4), pages 383-396, October. [Downloadable!] (restricted)
  32. Barbara Petrongolo & Christopher A. Pissarides, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June. [Downloadable!] (restricted)
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  33. H. J. Holzer, . "Why do small establishments hire fewer blacks than large ones," Institute for Research on Poverty Discussion Papers 1119-97, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  34. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. DUJARDIN Claire & SELOD Harris & THOMAS Isabelle, 2007. "Residential segregation and unemplyment : the case of Brussels," Research Unit Working Papers 0704, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
    Other versions:
  2. Zenou, Yves, 2008. "Social Interactions and Labor Market Outcomes in Cities," IZA Discussion Papers 3283, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. GOBILLON, Laurent & MAGNAC, Thierry & SELOD, Harris, 2007. "The Effect of Location of Finding a Job in the Paris Region," IDEI Working Papers 433, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  4. Laurent Gobillon & Thierry Magnac & Harris Selod, 2007. "The Effect of Location on Finding a Job in the Greater Paris Area," IZA Discussion Papers 2848, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Gobillon, Laurent & Selod, Harris & Zenou, Yves, 2005. "The mechanisms of spatial mismatch," CEPR Discussion Papers 5346, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Battu, Harminder & Seaman, Paul T & Zenou, Yves, 2005. "Job Contact Networks and the Ethnic Minorities," CEPR Discussion Papers 5225, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Zenou, Yves, 2007. "Search in Cities," CEPR Discussion Papers 6197, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Yves Zenou, 2007. "High Relocation Costs in Search-Matching Models: Theory and Application to Spatial Mismatch," IZA Discussion Papers 2739, Institute for the Study of Labor (IZA). [Downloadable!]
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