Social Interactions, Ethnic Minorities and Urban Unemployment
We develop a model in which blacks' ethnic preferences can lead to adverse labor-market outcomes. Because of these preferences, we show that multiple equilibria emerge: they correspond to different urban structures observed in the US. By incorporating in this spatial structure a simple search model, we show that distance to jobs is crucial to the labor-market outcomes of ethnic minorities whereas it matters less for whites because of their strong inherited advantage in terms of history.
(This abstract was borrowed from another version of this item.)
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