It is well-known that the unemployment rate differential between people of foreign and French origins has increased over the past decades. This statement must be completed by two key features. First, the unemployment rate differential is considerably higher in large cities than in small ones. Second, this geographic dualism has been magnified over time. This paper documents these two facts and offers a credible interpretation that relies on market failures on local labour markets. The hypotheses we test are the following ones. 1) People of foreign origin are mostly discriminated against in jobs which imply a face-to-face interaction with the customers. 2) Jobs that do not imply such an interaction have been swept out of big cities because of the increase in land prices; the proportion of discriminationprone jobs in urban areas has increased accordingly. If we buy the idea that foreign populations were stuck in large cites due to biased preferences or reasons linked to the housing market (an hypothesis we test in the companion paper we publish in this issue of the journal), we shed light on a spatial mismatch for foreign population at the national level. It would have been easier for them to find a non-discriminated job in smaller cities. Our empirical work is based on national labor surveys (FQP and CdT) and the French census.
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Paper provided by Institut d'economie publique (IDEP), Marseille, France in its series IDEP Working Papers with number
0809.