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5 Residential Segregation, Job Proximity, and Black Job Opportunities
Pages 187-222

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From page 187...
... On the demand side, Kain argued that suburbanization of jobs was likely to reduce employers' willingness to hire black workers because many suburban firms feared that bringing black workers into an all-white suburb would offend white residents. Yet Kain also noted the possibility that residential segregation might benefit blacks, since employers in all-black areas might be more willing to hire blacks than employers in the mixed areas that would come into existence if cities were not segregated.
From page 188...
... Central-city jobs are increasingly likely to require high levels of education (Kasarda, 1989) , and while the educational gap between young black and young white workers has narrowed dramatically, there are still substantial disparities in academic skill.t As a result, many scholars, political leaders, and journalists still view the spatial mismatch hypothesis as a plausible explanation of rising black joblessness.2 This chapter reviews the currently available evidence regarding Kain's major hypotheses.
From page 189...
... We would need longitudinal data to estimate the contribution of selective migration to the correlation between earnings and community characteristics. No such data were available when we did this review, so there was no way to estimate the effect of a neighborhood's mean SES on adults' job opportunities.3 RESIDENTIAL SEGREGATION AND DEMAND FOR BLACK WORKERS Theoretical Issues Kain argued that a firm's attitude toward hiring black workers was likely to vary with the racial mix of the neighborhood in which it was located.
From page 190...
... His arguments imply, however, that manufacturing firms in mixed areas would be indifferent between equally competent black and white workers, since they would not be worried about bringing blacks into mixed areas. The picture is more complicated for retail firms.
From page 191...
... All the factors that influence the costs and benefits of residential segregation are likely to have changed over the past 30 years. Thus even if we were to accept Kain's claim that residential segregation reduced aggregate demand for black workers in Chicago and Detroit in the l950s, we could not assume segregation had the same effect today.
From page 192...
... Since residential desegregation does not alter the total number of blacks or whites, at least in the short run, it does not change the overall mean of R Using Kain's assumptions, therefore, residential segregation only affects blacks' share of total employment indirectly, that is, by affecting their average proximity to jobs (d )
From page 193...
... in 1959. Contrary to what we would expect if residential segregation reduced demand for nonwhite workers, the ratio of nonwhite to white incomes was slightly higher in highly segregated SMSAs.
From page 194...
... Unfortunately, this ratio measures not only the relative accessibility of suburban jobs to blacks and whites but the relative willingness of suburban employers to hire blacks rather than whites ("demand"~. Kain's argument implies that A is at least partly endogenous and should not be controlled when estimating the effects of residential segregation.
From page 195...
... The wage premium that whites demand for working in the ghetto has probably risen since 1969, because crime has increased even more in the ghetto than elsewhere,8 but again, we know of no hard evidence on this point. If whites do, in fact, demand higher premiums for working in the ghetto, this is likely to have had two contradictory effects on job opportunities for blacks.
From page 196...
... It is also important to emphasize that we know nothing whatever about how residential segregation along economic lines affects demand for black workers. EFFECTS OF JOB PROXIMITY ON LABOR SUPPLY Kain showed that as a neighborhood's distance from the central-city ghetto increased the proportion of neighborhood jobs held by nonwhites declined.
From page 197...
... 2. Do blacks fare better when they live in metropolitan areas where blue-collar jobs are still mainly located in the central city rather than in the suburbs?
From page 198...
... effect on Los Angeles men's chances of being employed in 1980. The negligible correlation between job proximity and male employment rates in Pittsburgh and Los Angeles is puzzling, since we would expect workers with steady jobs to settle near their workplace.
From page 199...
... Using somewhat better measures of job proximity, Ihlanfeldt and Sjoquist found relatively large effects in Philadelphia, Chicago, and Los Angeles. They divided the Philadelphia SMSA into 26 areas, calculated the average travel time of low-wage workers in each area, and used this average as a measure of low-wage jobs' accessibility from that area.
From page 200...
... After controlling an SMSA's overall racial mix and a measure of black-white educational inequality in the SMSA, the ratio of black to white unemployment was lower in SMSAs where manufacturing, trade, and service jobs were mainly located in the central city. In explaining Mooney and Farley's findings it is important to bear in mind that they did not find that the absolute level of black employment was higher in cities where manufacturing, trade, and services were concentrated in the central city.
From page 201...
... This may lead unskilled workers who find suburban jobs to live in the central city, since they may save enough on housing to offset their extra commuting costs. Because they include commuting costs while excluding housing costs, Ihlanfeldt and Sjoquist probably overestimate the adverse effect of job decentralization on central-city residents' economic welfare.
From page 202...
... This hypothesis depends on two empirical assumptions: that distance affects a worker's chances of finding a job and that there are, in fact, better jobs available to blacks in distant areas (Kasarda, 1989~. One way to test the latter assumption is to ask whether blacks in the central city who commute to the suburbs earn more than those who work in the ghetto (or in the central business district)
From page 203...
... But they are also consistent with a more traditional view, namely that suburban jobs pay more than ghetto jobs because they impose higher commuting costs on most workers. These percentages would be lower for blacks who lived in central cities and still lower for blacks living in central-city poverty areas.
From page 204...
... Instead, they divide SMSAs into 13 to 27 work zones. These work zones include each SMSA:s central business district, the rest of the central city, and 11 to 25 suburban areas.
From page 205...
... Since there were no obvious constraints on where whites worked, this finding suggests that Hughes and Madden's wage equations probably omit important worker characteristics. All else equal, Hughes and Madden found that blacks earned more when they worked near the periphery of the Cleveland and Philadelphia SMSAs rather than near the center, but the difference was substantively trivial and statistically unreliable.
From page 206...
... _~_ -- it- ~D HOW DO BLACKS FARE WHEN THEY LIVE IN THE SUBURBS? At bottom, the spatial mismatch hypothesis is rooted in the observation that exclusionary housing practices have kept blacks from moving to the suburbs, where their job prospects might be better than they are in the central city.
From page 207...
... For blacks, the price differences were even larger: 28 percent for owner-occupied homes and 30 percent for renege Price differences between central-city and suburban housing ensure that migration between central cities and suburbs would be somewhat selective even if residential choices had no effect whatever on job opportunities. Family heads with steady, well-paid jobs can afford to live in the suburbs.
From page 208...
... Such data exist, but so far as we have been able to discover, no one has used them to analyze black migration between central cities and suburbs.l9 This means that even if we find a relationship between living in the suburbs and economic success we cannot tell how much of the relationship is due to selective migration and how much, if any, is due to the fact that suburbanites have better access to certain kinds of jobs. But if we find no difference between those who live in the suburbs and those who live in the central city, it is hard to argue that living in a suburb improves job opportunities.
From page 209...
... In 1969, joblessness among such men averaged 18.8 percent in central cities and 16.3 percent in the suburbs, suggesting that black suburbanites with limited education were not much better off than their central-city counterparts.22 This finding is consistent with both Harrison's work and Able 5-1. Joblessness among black dropouts rose steadily after 1969 in both central cities 21The sampling error of the urban-suburban difference for any one year is quite large.
From page 210...
... By 1987, 49.5 percent of all black dropouts in central cities were jobless in a typical month, compared to "only" 33.4 percent in the suburbs. Kasarda focused on black men who had not finished high school because the spatial mismatch hypothesis suggests that residential location should be especially important for such men.
From page 211...
... Column 4 of Table 5-1 shows that in large SMSAs black suburban males with steady jobs earned 12 percent more than their central-city counterparts in 1967-1971, 11 percent more in 1972-1976, 9 percent more in 1977-1981, and 13 percent more in 1982-1986.23 These figures are consistent with the claim that job opportunities are better for suburban men, but they could also be due to selective migration. Harrison's findings suggest that, at least in the 1960s, the earnings differential between central-city and suburban blacks should disappear once we control educational attainment.
From page 212...
... With both education and occupation controlled, black males earned 6 percent more if they lived in suburbs rather than central cities, while white males earned 8 percent more.25 Vrooman and Greenfield (1980) also estimated the effect of suburban residence on black men and women's earnings in the early 1970s, but their sample is so small and unrepresentative that we cannot put much weight on their findings.26 24Table 5-3 shows no difference in weekly earnings between central-city and suburban blacks in either 1959 or 1969, even when we do not control education.
From page 213...
... The spatial mismatch between black job opportunities and black housing options that Kain described in 1968, while exaggerated at that time, has become quite important since then. Because social conditions in black central-city neighborhoods deteriorated dramatically between 1965 and 1975, black migration between central cities and suburbs became far more selective than it had previously been.
From page 214...
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From page 215...
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From page 216...
... The price of housing in black suburbs should also have increased faster over the past 20 years than the price of comparable housing in black central-city neighborhoods. We have not reviewed the literature on housing prices, but our informal inquiries uncovered no work on trends in the relative price of housing in urban versus suburban black neighborhoods.28 Unless the price of black suburban housing has risen faster than the price of comparable housing in other areas, it is hard to argue that discrimination has discouraged blacks from moving to black suburban areas although one can certainly argue that discrimination has discouraged blacks from moving to white areas.
From page 217...
... Demand for Black Workers Residential segregation is likely to reduce demand for black workers in white areas and increase demand for black workers in black areas. Whether the net result is to increase or decrease aggregate demand for black workers depends on a number of factors: how strongly whites dislike working in black areas, how strongly blacks dislike working in white areas, whether black customers prefer trading with firms that discriminate in favor of black workers, whether white customers prefer trading with firms that discriminate in favor of white workers, whether firms that mainly hire blacks are more or less productive than firms that mainly hire whites, and hence whether firms prefer hiring relatively cheap labor in the ghetto or more expensive labor in white areas.
From page 218...
... Distance does have an effect on black teenagers' chances of working in Philadelphia, Los Angeles, and Chicago, however, and in the best currently available study distance explains 30 to 50 percent of the racial gap in teenage employment rates. While job proximity does not appear very important for adults in Pittsburgh or Los Angeles, blacks do seem to have done better economically in both 1960 and 1980 when they lived in SMSAs where manufacturing, trade, and service jobs were concentrated in the central city rather than in the suburbs.
From page 219...
... First, since theory suggests that the effects of living in the central-city ghetto are likely to have changed over time, since the available descriptive statistics also point to such changes, and since much of the most widely cited evidence in this debate is now more than 20 years old, we need to use the census, the CPS, and the PSID to assemble time series comparing: · blacks who live in suburbs to blacks who live in central cities; blacks who work in suburbs to blacks who work in central cities; blacks who live in very large cities, where the spatial mismatch hypothesis seems likely to have its strongest effect, to blacks who live in smaller cities, where travel time to suburban jobs is likely to be modest; blacks who live in cities where most blue-collar jobs are far from the central-city ghetto to blacks who live in cities where most blue-collar jobs are close to the central-city ghetto; and blacks who live in highly segregated SMSAs to blacks who live in less segregated SMSAs. All these tabulations should be broken down by sex, educational level, and age.
From page 220...
... We then need to estimate the contribution of selective migration to employment and earning differences between central~ity and suburban blacks. Social scientists' collective failure to take account of selective migration is probably the single most important reason why we have learned so little about this subject in the two decades since Kain first advanced the spatial mismatch hypothesis.
From page 221...
... Hughes, Mark Alan, and Janice Fanning Madden Forth- Residential segregation and the economic status of black workers: New coming evidence for an old debate. Joumal of Urban Economics.
From page 222...
... Unpublished paper, School of Business Administration, University of California, Berkeley. 1987 The interaction of residential segregation and employment discrimination.


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