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Space and Unemployment: The Labor-Market Effects of Spatial Mismatch

  • Jan K. Brueckner

    (University of Illinois at Urbana-Champaign)

  • Yves Zenou

    (University of Southampton)

The aim of this article is to analyze the effects of housing discrimination on the wages and unemployment rates of black workers. The unemployment effect is first analyzed using a simple minimum-wage model. An efficiency-wage model is then adopted in order to endogenize both unemployment and wages. Under both models, suburban housing discrimination leads to a higher unemployment rate for blacks in the central city than in the suburbs. Under the efficiency-wage model, black wages are also lower in the center. The analysis thus generates a link between unemployment and a seemingly unrelated phenomenon: racial discrimination in the housing market.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 21 (2003)
Issue (Month): 1 (January)
Pages: 242-262

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Handle: RePEc:ucp:jlabec:v:21:y:2003:i:1:p:242-241
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Richard Arnott, 1998. "Economic Theory and the Spatial Mismatch Hypothesis," Urban Studies, Urban Studies Journal Limited, vol. 35(7), pages 1171-1185, June.
  2. Martin, Richard W., 1997. "Job Decentralization with Suburban Housing Discrimination: An Urban Equilibrium Model of Spatial Mismatch," Journal of Housing Economics, Elsevier, vol. 6(4), pages 293-317, December.
  3. 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.
  4. Smith, Tony E. & Zenou, Yves, 1997. "Dual Labor Markets, Urban Unemployment, and Multicentric Cities," Journal of Economic Theory, Elsevier, vol. 76(1), pages 185-214, September.
  5. Peter Mieszkowski & Edwin S. Mills, 1993. "The Causes of Metropolitan Suburbanization," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 135-147, Summer.
  6. ZENOU, Yves & SMITH, Tony E., 1994. "Efficiency Wages, Involuntary Unemployment and Urban Spatial Structure," CORE Discussion Papers 1994076, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
  8. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  9. Edwin S. Mills & Luan Sende Lubuele, 1997. "Inner Cities," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 727-756, June.
  10. Yinger, John, 1997. "Cash in Your Face: The Cost of Racial and Ethnic Discrimination in Housing," Journal of Urban Economics, Elsevier, vol. 42(3), pages 339-365, November.
  11. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  12. Coulson, N Edward & Laing, Derek & Wang, Ping, 2001. "Spatial Mismatch in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 949-72, October.
  13. Price, Richard & Mills, Edwin, 1985. "Race and residence in earnings determination," Journal of Urban Economics, Elsevier, vol. 17(1), pages 1-18, January.
  14. 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.
  15. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do the Poor Live in Cities?," NBER Working Papers 7636, National Bureau of Economic Research, Inc.
  16. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
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