Working Paper: CEPR ID: DP2397
Authors: Jan K. Brueckner; Yves Zenou
Abstract: The aim of this paper is to analyse the effects of suburban housing discrimination on the wages and unemployment rates of black workers. In a duocentric city with efficiency wages, it is shown that, when blacks experience suburban housing discrimination, they face a higher unemployment rate in the central city than in the suburbs, also earning lower wages in the centre. An increase in commuting costs is shown to raise both these disparities, and a number of other results are established. The analysis thus generates a link between housing-market discrimination and a seemingly unrelated phenomenon: unemployment in the labour market. In doing so, the paper provides new insight into the spatial mismatch hypothesis.
Keywords: Urban Unemployment; Efficiency Wages; Ethnic Minorities; Location
JEL Codes: J15; J41; R14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Suburban housing discrimination (R28) | Higher unemployment rate for black workers in the central city (J69) |
| Suburban housing discrimination (R28) | Concentrated black labor market in the CBD (R23) |
| Concentrated black labor market in the CBD (R23) | Higher unemployment rate for black workers in the central city (J69) |
| Concentrated black labor market in the CBD (R23) | Lower wages for black workers (J79) |
| Commuting costs (R41) | Unemployment disparity between CBD and suburbs (R23) |
| Housing market discrimination (R31) | Inferior labor market outcomes (higher unemployment, lower wages) (F66) |