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Ethnic Unemployment Rates and Frictional Markets

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  • Gobillon, Laurent
  • Rupert, Peter
  • Wasmer, Etienne

Abstract

The unemployment rate in France is roughly 6 percentage points higher for African immigrants than for natives. In the US the unemployment rate is approximately 9 percentage points higher for blacks than for whites. Commute time data indicates that minorities face longer commute times to work, potentially reflecting more difficult access to jobs. In this paper we investigate the impact of spatial mismatch on the unemployment rate of ethnic groups using the matching model proposed by Rupert and Wasmer (2012). We find that spatial factors explain between 1 to 1.5 percentage points of the unemployment rate gap in both France and the US, amounting to 17% to 25% of the relative gap in France and about 10% in the US. Among these factors, differences in commuting distance plays the most important role. In France, though, longer commuting distances may be mitigated by higher mobility in the housing market for African workers. Overall, we still conclude that labor market factors remain the main explanation for the higher unemployment rate of Africans.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9507.

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Date of creation: Jun 2013
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Handle: RePEc:cpr:ceprdp:9507

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Keywords: discrimination; ethnic groups; local markets; matching model;

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  1. Hellerstein, Judith K. & Neumark, David & McInerney, Melissa, 2008. "Spatial mismatch or racial mismatch?," Journal of Urban Economics, Elsevier, vol. 64(2), pages 464-479, September.
  2. George J. Borjas & Stephen G. Bronars, 1988. "Consumer Discrimination and Self-Employment," NBER Working Papers 2627, National Bureau of Economic Research, Inc.
  3. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July.
  4. Mortensen, Dale T & Pissarides, Christopher A, 1999. "Unemployment Responses to 'Skill-Biased' Technology Shocks: The Role of Labour Market Policy," Economic Journal, Royal Economic Society, vol. 109(455), pages 242-65, April.
  5. Zax, J.S. & Kain, J.F., 1991. "Moving to the Suburbs: Do Relocating Companies Leave Their Black Employees Behind?," Harvard Institute of Economic Research Working Papers 1562, Harvard - Institute of Economic Research.
  6. Gautier, Pieter A. & Zenou, Yves, 2010. "Car ownership and the labor market of ethnic minorities," Journal of Urban Economics, Elsevier, vol. 67(3), pages 392-403, May.
  7. Jan K. Brueckner & Yves Zenou, 2003. "Space and Unemployment: The Labor-Market Effects of Spatial Mismatch," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 242-262, January.
  8. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, March.
  9. Combes, Pierre-Philippe & Decreuse, Bruno & Laouénan, Morgane & Trannoy, Alain, 2014. "Customer Discrimination and Employment Outcomes: Theory and Evidence from the French Labor Market," IZA Discussion Papers 8150, Institute for the Study of Labor (IZA).
  10. Romain Aeberhardt & Denis Fougère & Julien Pouget & Roland Rathelot, 2007. "Wages and Employment of French Workers with African Origin," Working Papers 2007-36, Centre de Recherche en Economie et Statistique.
  11. Robert E. Lucas & Esteban Rossi-Hansberg, 2002. "On the Internal Structure of Cities," Econometrica, Econometric Society, vol. 70(4), pages 1445-1476, July.
  12. 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.
  13. David T. Ellwood, 1986. "The Spatial Mismatch Hypothesis: Are There Teenage Jobs Missing in the Ghetto?," NBER Chapters, in: The Black Youth Employment Crisis, pages 147-190 National Bureau of Economic Research, Inc.
  14. Judith K. Hellerstein & David Neumark, 2011. "Employment in Black Urban Labor Markets: Problems and Solutions," NBER Working Papers 16986, National Bureau of Economic Research, Inc.
  15. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  16. Weinberg, Bruce A., 2004. "Testing the spatial mismatch hypothesis using inter-city variations in industrial composition," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 505-532, September.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Ethnic ghettos and unemployment
    by Economic Logician in Economic Logic on 2013-08-23 14:52:00
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Cited by:
  1. David Neumark & Helen Simpson, 2014. "Place-Based Policies," NBER Working Papers 20049, National Bureau of Economic Research, Inc.

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