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Ethnic differentials on the labor market in the presence of asymmetric spatial sorting: Set identification and estimation

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  • Rathelot, Roland

Abstract

This paper aims to isolate the ethnic gap on the labor market that can be attributed to ethnicity and not to differences in individual characteristics or residential location. Controlling for residential location is important as ethnic minorities often live in distressed neighborhoods. It is also challenging because spatial sorting is likely to differ across ethnicities because of labor- or housing-market discrimination. This paper shows that controlling for neighborhoods and observed individual characteristics fails to provide a consistent estimate for the component of the gap accountable to ethnicity only. However, under some assumptions, the quantity of interest is set identified even when heterogeneous sorting patterns across ethnicities are allowed for and the set estimate can still be informative. A two-step estimation method is presented and applied to explain the ethnic employment differential in France, between French individuals of North African ancestry and those with non-immigrant parents. Most of the gap is not due to differences in residential location or individual characteristics, but rather to ethnicity itself.

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  • Rathelot, Roland, 2014. "Ethnic differentials on the labor market in the presence of asymmetric spatial sorting: Set identification and estimation," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 154-167.
    • Handle: RePEc:eee:regeco:v:48:y:2014:i:c:p:154-167
    DOI: 10.1016/j.regsciurbeco.2014.06.007
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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. Picard, Pierre M. & Zenou, Yves, 2018. "Urban spatial structure, employment and social ties," Journal of Urban Economics, Elsevier, vol. 104(C), pages 77-93.
    3. Romain Aeberhardt & Élise Coudin & Roland Rathelot, 2017. "The heterogeneity of ethnic employment gaps," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 307-337, January.
    4. repec:hal:spmain:info:hdl:2441/bakbbitll86c9mofo099uih8m is not listed on IDEAS
    5. Yann Algan & Clément Malgouyres & Thierry Mayer & Mathias Thoenig, 2022. "The Economic Incentives of Cultural Transmission: Spatial Evidence from Naming Patterns Across France," The Economic Journal, Royal Economic Society, vol. 132(642), pages 437-470.
    6. Martin Abel, 2017. "Labor market discrimination and sorting: Evidence from South Africa," SALDRU Working Papers 205, Southern Africa Labour and Development Research Unit, University of Cape Town.
    7. Haley McAvay, 2018. "How Durable Are Ethnoracial Segregation and Spatial Disadvantage? Intergenerational Contextual Mobility in France," Demography, Springer;Population Association of America (PAA), vol. 55(4), pages 1507-1545, August.
    8. repec:hal:spmain:info:hdl:2441/h23tra6lt8ora7hjg2kqou65h is not listed on IDEAS

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    More about this item

    Keywords

    Ethnic employment gaps; Spatial sorting; Set identification; Discrimination; Spatial mismatch;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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