DP5346 The mechanisms of spatial mismatch

Author(s): Laurent Gobillon, Harris Selod, Yves Zenou
Publication Date: November 2005
Keyword(s): discrimination, ghettos, segregation, urban unemployment
JEL(s): J15, J41, R14
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5346

The Spatial Mismatch Hypothesis (SMH) argues that low-skilled minorities residing in U.S. inner cities experience poor labour-market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which confirmed this hypothesis. Surprisingly, however, it is only recently that theoretical models have emerged, which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested. In this survey, we present relevant facts, review the theoretical models of spatial mismatch, confront their predictions with available empirical results, and indicate which mechanisms deserve further empirical tests.