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From Rivers to Roads: Spatial Mismatch and Inequality of Opportunity in Urban Labor Markets of a Megacity

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  • Eduardo A. Haddad

    ()

  • Ana Maria Bonomia Barufi

    ()

Abstract

The spatial mismatch between residential locations and jobs can be particularly relevant for low-skilled individuals. In this paper, we first explore such phenomenon from the perspective of the distance of the residence to the geographic concentration of jobs, and locational disadvantages of the urban form itself. Such unequal conditions in the labor market present a great challenge for the spatial sustainability of the multiple equilibria achieved simultaneously at the labor and the housing markets. We estimate the main aspects that influence wage differentials among individuals, focusing on the role of accessibility on labor market outcomes. We suggest the inclusion of geographical characteristics as instruments to deal with endogeneity problems that arise in the estimation of urban price models. Our strategy is based on the inclusion of a specific geographic/historic variable as instrument, namely the river shore access to the first school built by the Jesuits in São Paulo, the city’s founding location. Geography acted as a determinant of the location of the transportation infrastructure in the region, so that the road and rail networks in the city present a strong spatial correlation with pre-urban “waterways”. Nowadays, the vast majority of rivers and creeks are covered with asphalt and cement, and economic agents are practically unaware of their existence.

Suggested Citation

  • Eduardo A. Haddad & Ana Maria Bonomia Barufi, 2016. "From Rivers to Roads: Spatial Mismatch and Inequality of Opportunity in Urban Labor Markets of a Megacity," Working Papers, Department of Economics 2016_40, University of São Paulo (FEA-USP).
  • Handle: RePEc:spa:wpaper:2016wpecon40
    as

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    References listed on IDEAS

    as
    1. Zenou,Yves, 2009. "Urban Labor Economics," Cambridge Books, Cambridge University Press, number 9780521698221, October.
    2. repec:dgr:uvatin:20090014 is not listed on IDEAS
    3. Daniel J. Graham & Patricia C. Melo, 2009. "Agglomeration Economies and Labour Productivity: Evidence from Longitudinal Worker Data for GBs Travel-to-Work Areas," SERC Discussion Papers 0031, Spatial Economics Research Centre, LSE.
    4. Zenou, Yves, 2002. "How do firms redline workers?," Journal of Urban Economics, Elsevier, vol. 52(3), pages 391-408, November.
    5. van Ommeren, Jos N. & Gutiérrez-i-Puigarnau, Eva, 2011. "Are workers with a long commute less productive? An empirical analysis of absenteeism," Regional Science and Urban Economics, Elsevier, vol. 41(1), pages 1-8, January.
    6. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
    7. Robert E. Lucas & Esteban Rossi-Hansberg, 2002. "On the Internal Structure of Cities," Econometrica, Econometric Society, vol. 70(4), pages 1445-1476, July.
    8. Haddad, Eduardo A. & Hewings, Geoffrey J.D. & Porsse, Alexandre A. & Van Leeuwen, Eveline S. & Vieira, Renato S., 2015. "The underground economy: Tracking the higher-order economic impacts of the São Paulo Subway System," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 18-30.
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    More about this item

    Keywords

    Accessibility; inequality; urban labor market; São Paulo Metropolitan Region;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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