Spatial Mismatch and the Duration of Joblessness

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...better job accessibility significantly decreases the duration of joblessness among lower-paid displaced workers.

Urban concentrations of lower-income and minority populations have higher than average unemployment rates. The spatial mismatch hypothesis (SMH) postulates that a worker with locally inferior job access is likely to experience worse labor market outcomes. If it is correct, then improving spatial access to jobs could lead to better employment outcomes. This logic has inspired urban planning policies aimed at moving jobs closer to neighborhoods with high unemployment, such as Employment Zones, as well as efforts to enhance transportation links between high unemployment neighborhoods and locations with an abundance of jobs. It also underpins proposals to relocate residents of high unemployment neighborhoods to job-abundant neighborhoods, for example, with a housing voucher program.

In Job Displacement and the Duration of Joblessness: The Role of Spatial Mismatch (NBER Working Paper No. 20066), authors Fredrik Andersson, John Haltiwanger, Mark Kutzbach, Henry Pollakowski, and Daniel Weinberg study spatial mismatch by combining information from several data sources to generate improved person- and location-specific measures of job accessibility. They focus on workers displaced in mass layoffs, and investigate whether the job search duration after such a layoff is related to accessibility to appropriate jobs. This project exploits rich, matched employer-employee administrative data on job histories and search outcomes, as well as data on worker characteristics and neighborhood data from the decennial census, and comprehensive transportation network data from nine large Great Lakes metropolitan areas.

The authors find that better job accessibility significantly decreases the duration of joblessness among lower-paid displaced workers. In the center of the job accessibility distribution, an increase from the 25th to the 75th percentile of job accessibility is associated with a 4.2 percent reduction in search duration for finding any job, and a 5.6 (7.0) percent reduction for accessions to new jobs with pay equal to 75 (90) percent of prior job earnings, respectively. While job accessibility is only one of many factors affecting job search outcomes, it appears to play an especially important role for black workers, for women, and for older workers.

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