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Racial Discrimination and Redlining in Cities

  • Zenou, Yves
  • Boccard, Nicolas

We propose a model where employers have two types of prejudices: racial and spatial discriminations. Because of the rst one, black workers have less chance than white workers to nd a job. Because of the second one, workers living closer to the city-center have less chances than suburban workers to nd a job. In this context, we show that depending on the importance of access costs to employment centers two urban equilibria may emerge. In Equilibrium 1 (the access cost for blacks is quite large), black and white workers are totally separated while in Equilibrium 2 (the access cost for blacks is relatively small), workers are separated by their employment status (the unemployed versus the employed). We then study the labor market equilibrium and its interactions with the land market. We show in particular that both race and space matter to explain high unemployment rates among blacks.

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

Volume (Year): 48 (2000)
Issue (Month): 2 (September)
Pages: 260-285

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Handle: RePEc:eee:juecon:v:48:y:2000:i:2:p:260-285
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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  1. Zenou, Yves & Smith, Tony E., 1995. "Efficiency wages, involuntary unemployment and urban spatial structure," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 547-573, August.
  2. Frédéric GANNON & Yves ZENOU, 1997. "Segregation and Labor Discrimination in Cities," Annales d'Economie et de Statistique, ENSAE, issue 45, pages 233-249.
  3. 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.
  4. Edward L. Glaeser & Bruce Sacerdote, 1999. "Why Is There More Crime in Cities?," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S225-S258, December.
  5. Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 619-52, August.
  6. Ihlanfeldt Keith R., 1993. "Intra-urban Job Accessibility and Hispanic Youth Employment Rates," Journal of Urban Economics, Elsevier, vol. 33(2), pages 254-271, March.
  7. Leslie E. Papke, 1991. "Tax Policy and Urban Development: Evidence From The Indiana Enterprise Zone Program," NBER Working Papers 3945, National Bureau of Economic Research, Inc.
  8. Brueckner, Jan K. & Zenou, Yves, 1999. "Harris-Todaro models with a land market," Regional Science and Urban Economics, Elsevier, vol. 29(3), pages 317-339, May.
  9. Zenou, Yves, 1999. "Urban Unemployment, Agglomeration and Transportation Policies," CEPR Discussion Papers 2309, C.E.P.R. Discussion Papers.
  10. Hartwick, John & Schweizer, Urs & Varaiya, Pravin, 1976. "Comparative statics of a residential economy with several classes," Journal of Economic Theory, Elsevier, vol. 13(3), pages 396-413, December.
  11. Brueckner, Jan K. & Martin, Richard W., 1997. "Spatial mismatch: An equilibrium analysis," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 693-714, November.
  12. Scott South & Kyle Crowder, 1997. "Residential mobility between cities and suburbs: race, suburbanization, and back-to-the-city moves," Demography, Springer, vol. 34(4), pages 525-538, November.
  13. Ihlanfeldt, Keith R & Sjoquist, David L, 1990. "Job Accessibility and Racial Differences in Youth Employment Rates," American Economic Review, American Economic Association, vol. 80(1), pages 267-76, March.
  14. Mauer, David C. & Ott, Steven H., 1999. "On the Optimal Structure of Government Subsidies for Enterprise Zones and Other Locational Development Programs," Journal of Urban Economics, Elsevier, vol. 45(3), pages 421-450, May.
  15. O'Neill, June, 1990. "The Role of Human Capital in Earnings Differences between Black and White Men," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 25-45, Fall.
  16. Rose-Ackerman, Susan, 1975. "Racism and urban structure," Journal of Urban Economics, Elsevier, vol. 2(1), pages 85-103, January.
  17. Douglas Massey & Nancy Denton, 1989. "Hypersegregation in U.S. Metropolitan Areas: Black and Hispanic Segregation Along Five Dimensions," Demography, Springer, vol. 26(3), pages 373-391, August.
  18. 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.
  19. 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.
  20. Boarnet, Marlon G. & Bogart, William T., 1996. "Enterprise Zones and Employment: Evidence from New Jersey," Journal of Urban Economics, Elsevier, vol. 40(2), pages 198-215, September.
  21. 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.
  22. Rasmusen, Eric, 1996. "Stigma and Self-Fulfilling Expectations of Criminality," Journal of Law and Economics, University of Chicago Press, vol. 39(2), pages 519-43, October.
  23. Raphael, Steven, 1998. "The Spatial Mismatch Hypothesis and Black Youth Joblessness: Evidence from the San Francisco Bay Area," Journal of Urban Economics, Elsevier, vol. 43(1), pages 79-111, January.
  24. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
  25. Benabou, Roland, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 237-64, April.
  26. Leonard, Jonathan S, 1996. "Wage Disparities and Affirmative Action in the 1980's," American Economic Review, American Economic Association, vol. 86(2), pages 285-89, May.
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