Competing for opportunity: Transport infrastructures and localized unemployment

Unemployment rates vary significantly across neighborhoods and worker types, yet the role of transport infrastructures in explaining these disparities remains unexplored. We propose a quantitative urban model with frictional unemployment and heterogeneous workers where better connections between neighborhoods might exacerbate unemployment disparities due to competition among workers. We document this phenomenon using a difference-indifferences to estimate the impact of the creation of the Paris Regional Express Rail (RER). We find that the project increased the unemployment rate of low-skilled workers, but not of their high-skilled counterparts. In Paris, differences in job market access reduce unemployment inequalities between college graduates and the rest of the population.