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Economic Theory and the Spatial Mismatch Hypothesis

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  • Richard Arnott

    (Department of Economics, Boston College, Chestnut Hill, MA 02167, USA, richard.arnott@bc.edu)

Abstract

The spatial mismatch hypothesis is that "Serious limitations on black residential choice, combined with the steady dispersal of jobs from central cities, are responsible for the low rates of employment and low earnings of Afro-American workers" (Kain, 1994, p. 371). Despite a wealth of related empirical studies, there has been little work formalising the hypothesis. This paper presents a trade-theoretic model, with three regions (downtown, suburbia and the rest of the world), four goods (a tradable home good, untraded services, a tradable foreign good and land), and two factors (skilled and unskilled workers). Blacks are constrained to live downtown but by incurring commuting costs can work in suburbia. Several exogenous changes are considered (for example a fall in transport costs between suburbia and the rest of the world) which may lead simultaneously to a fall in the downtown unskilled wage and to job suburbanisation, and which therefore provide a theoretical basis for the hypothesis.

Suggested Citation

  • Richard Arnott, 1998. "Economic Theory and the Spatial Mismatch Hypothesis," Urban Studies, Urban Studies Journal Limited, vol. 35(7), pages 1171-1185, June.
  • Handle: RePEc:sae:urbstu:v:35:y:1998:i:7:p:1171-1185
    DOI: 10.1080/0042098984547
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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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