Why Work Disappears: Neighborhood Racial Composition and Employers' Relocation Intentions

Over the past 25 years there has been a dramatic decline in the number of quality jobs located in central cities. This has disproportionately had an adverse impact on the economic prospects of African-Americans. One issue that has been neglected by most urban poverty researchers is the reasons why firms move. Using data from a representative sample of employers in Boston, Atlanta, Los Angeles, and Detroit, we assess the extent to which firms in these cities are more likely to express relocation intentions in neighborhoods with an increasing proportion of African American residents. Results indicate that firms in Boston and Los Angeles are indeed considerably more likely to express desires to flee neighborhoods with an increasing proportion of black residents. This exacerbates spatial mismatches in black urban communities. In Detroit and Atlanta, race displays little effect on firms' relocation intentions. Perhaps firms which are sensitive to race have long since relocated in Detroit and Atlanta, given their long histories of black/white balkanization and conflict.