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Economic Theory and the Spatial Mismatch Hypothesis

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  • Richard Arnott

    (Boston College)

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Richard Arnott, 1997. "Economic Theory and the Spatial Mismatch Hypothesis," Boston College Working Papers in Economics 390., Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:390
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    More about this item

    Keywords

    spatial mismatch hypothesis; labor markets; African Americans;
    All these keywords.

    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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