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Employment in Black Urban Labor Markets: Problems and Solutions

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  • Judith K. Hellerstein
  • David Neumark

Abstract

Blacks in the United States are poorer than whites and have much lower employment rates. “Place-based” policies seek to improve the labor markets in which blacks – especially low-income urban blacks – tend to reside. We first review the literature on spatial mismatch, which provides much of the basis for place-based policies. New evidence demonstrates an important racial dimension to spatial mismatch, and this “racial mismatch” suggests that simply creating more jobs where blacks live, or moving blacks to where jobs are located, is unlikely to make a major dent in black employment problems. We also discuss new evidence of labor market networks that are to some extent stratified by race, which may help explain racial mismatch. We then turn to evidence on place-based policies. Many of these, such as enterprise zones and Moving to Opportunity (MTO), are largely ineffective in increasing employment, likely because spatial mismatch is not the core problem facing urban blacks, and because, in the case of MTO, the role of labor market networks was weakened. Finally, we discuss policies focused on place that also target incentives and other expenditures on the residents of the targeted locations, which may do more to take advantage of labor market networks.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16986.

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Date of creation: Apr 2011
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Publication status: published as Hellerstein, Judith K., and Da vid Neumark, 2012, “Employment Problems in Black Urban Labor Markets: Problems and Solutions,” in The Oxford Handbook of the Economics of Poverty, Philip N. Jefferson, Ed. (Oxford: Oxford University Press), pp. 164-202.
Handle: RePEc:nbr:nberwo:16986

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Cited by:
  1. Gobillon, Laurent & Rupert, Peter & Wasmer, Etienne, 2014. "Ethnic unemployment rates and frictional markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 108-120.
  2. Judith K. Hellerstein & Mark J. Kutzbach & David Neumark, 2013. "Do labor market networks have an important spatial dimension?," Working Papers 2013/20, Institut d'Economia de Barcelona (IEB).
  3. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
  4. Mathieu Bunel & Emilia Ene Jones & Yannick L'Horty & Pascale Petit, 2013. "Discrimination based on place of residence and access to employment," Working Papers halshs-00870044, HAL.
  5. Zenou, Yves, 2011. "Explaining the Black/White Employment Gap: The Role of Weak Ties," CEPR Discussion Papers 8582, C.E.P.R. Discussion Papers.

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