Governance and Opportunity in Metropolitan America (1999) / Chapter Skim
Currently Skimming:
The Geography of Economic and Social Opportunity in Metropolitan Areas
The Geography of Economic and Social Opportunity in Metropolitan Areas
Pages 213-252
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From page 213... ...
Wilson maintains that an urban underclass population has grown rapidly in central-city ghettos as the result of an erosion in economic opportunities in these areas and the exodus of working-class and middle-class blacks to better neighborhoods. More generally, there is concern that a continuing high level of racial segregation and increasing income segregation in metropolitan area housing markets have increased the proportion of poor people residing in "bad" neighborhoods, in the sense that the latter offer poor proximity to available jobs, inferior schools, and negative neighborhood effects.)
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In 1990 unem TABLE 1 Unemployment Rates and Nonparticipation Rates Inside and Outside Central Cities of Metropolitan Statistical Areasa Inside Central Cities 1970 Outside Central Cities 1980 1990 1970 1980 1990 Unemployment Rate All races, both sexesb 4.7 7.3 7.8 3.9 5.7 5.0 White, both sexes 4.1 5.7 5.7 3.7 5.4 4.5 Male 3.8 5.9 6.0 3.2 5.3 4.6 Female 4.4 5.4 5.4 4~5 5~4 4~4 Black, both sexes 6.9 12.8 14.4 6.4 9.6 9.5 Male 6.7 13.9 15.9 5.8 9.7 9.8 Female 7.3 11.7 13.2 7.2 9.4 9.1 Rate of Nonparticipation in Labor Force, Workers Aged 25-64C All races, both sexesb 30.0 26.6 22.3 White, both sexes 29.6 25.6 20.3 Male 8.6 11.6 11.8 Female 49.0 39.0 28.7 Black, both sexes 30.0 28.9 27.0 20.2 22.6 35.7 30.6 Male Female 30.8 30.8 6.0 54.5 29.4 15.7 41.8 14.3 42.9 25.6 25.7 8.9 41.9 23.6 16.3 30.2 19.2 19.7 9.4 29.8 21.0 18.9 23.0 aUpdate of Table 11.6, p. 293, Urban Economics and Public Policy by James Heilbrum, St.
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From page 215... ...
. Rising central-city unemployment rates may illustrate only a portion of the labor market disadvantage associated with a central-city location, since many blacks living in central cities are believed to be "discouraged workers" (i.e., workers who have become so discouraged by their inability to find work that they dropped out of the labor force entirely)
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From page 216... ...
the labor market outcomes for central-city residents may be worsening relative to those of suburban residents and (2) people with better labor market outcomes may be choosing with greater frequency a suburban over a central-city residential location.
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From page 217... ...
In the case of the spatial mismatch hypothesis as originally formulated, the resource that varies is job accessibility, and the residential mobility constraint is the inability of blacks to follow jobs to the suburbs because of racial discrimination in the suburban housing market. However, Ihlanfeldt and Sjoquist (1989)
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From page 218... ...
In addition to the neighborhood effects listed by Jencks and Mayer, there are two other possibly important linkages that can be mentioned. First, results from the Gautreaux program (Rosenbaum, 1995)
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From page 219... ...
Educational Opportunity As alluded to above, all of the neighborhood effects identified by Jencks and Mayer peer influences, indigenous adult influences, and outside adult influences may cause differences in educational opportunities between poor and nonpoor neighborhoods. Peer influences may act to reduce learning opportunities in poor neighborhoods by depriving poor students of the possible benefits of being surrounded by smart and motivated students.
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From page 220... ...
In addition to educational differences arising from neighborhood effects, educational opportunities may also vary across school districts due to interdistrict fiscal disparities. These disparities are particularly severe between central cities, where the poor are concentrated, and white suburban areas (Bahl, 1994~.
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However, neither of these studies deals with the endogeneity of residential location, which is the most common methodological error that has plagued empirical investigations of the spatial mismatch hypothesis (Ihlanfeldt, 1992~. The hypothesis implies that job accessibility affects labor market outcomes, but both the standard theory of residential location (Mush, 1969)
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From page 222... ...
and Leonard (1986~. The latter two studies have played a major role in the spatial mismatch debate because each finds that racial differences in youth employment rates have little to do with job accessibility.7 The distinguishing characteristic of Raphael's model is that his access measure, which is obtained by estimating a gravity equation, is based on the change in jobs rather than the number of jobs in a specified commute of each census tract.
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From page 223... ...
This study is unique in that her data allow her to address the simultaneity problem between employment and residential location using a sample of males ages 18 to 55 residing in the Pittsburgh area who have submitted unemployment insurance claims. Hence, the results of this study provide some rare and seemingly reliable evidence on the spatial mismatch hypothesis as it applies to the employment of adults.
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The role played by spatial mismatch in explaining the employment and earnings of adults living in smaller metropolitan areas has not been studied. But since adults may be more able than youth to overcome poor job accessibility, the insignificant results found by Ihlanfeldt (1992)
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Evidence on Neighborhood Effects The effects that neighborhood characteristics have on individual behaviors and opportunities are extremely difficult to estimate reliably. The same problem that has plagued empirical investigations of the spatial mismatch hypothesisnamely, endogenous residential location confronts with even greater severity empirical studies of neighborhood effects.
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From page 226... ...
They conduct a number of sophisticated econometric tests to rule out the possibility that the neighborhood effects they find are just an artifact of the way families sort themselves among communities. Also new since the Jencks and Mayer review are two papers that highlight the difficulty of reliably estimating neighborhood effects because of the endogeneity of residential location.
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From page 227... ...
Studies Comparing Job Accessibility and Neighborhood Effects Generally, studies of spatial mismatch have focused exclusively on job accessibility as a determinant of labor market outcomes, whereas studies of neighborhood effects have failed to consider the neighborhood's proximity to available jobs. The failure to consider both job access and neighborhood effects together is problematic, since neighborhoods with negative effects are frequently distant from job opportunities for less educated workers.
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From page 228... ...
There is support, therefore, for both the spatial mismatch and the neighborhood effects hypotheses. Results for the children of Gautreaux participants showed that suburban in comparison to city movers are more likely to graduate from high school, attend college, and attend a four-year college.
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From page 229... ...
To handle the endogeneity of residential location, they measure housing segregation using the following variables: the number of municipalities in the MSA, the share of local government revenue in the state that comes from intergovernmental sources, and the number of rivers. Although anyone's choice of instruments can always be questioned, the results are robust with respect to alternative instruments and show that all of the outcome variables (except college degree)
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From page 230... ...
Personal mobility programs seek to link central-city workers with suburban jobs without changing either job or residential locations. Residential mobility strategies open up housing opportunities in those areas where conditions and opportunities are presumably better.~3 Numerous assessments of the above types of policies can be found in the literature (see, for example, Ihlanfeldt, 1992; Hughes, 1987~.~4 The focus here is to update these assessments by drawing on a substantial amount of new evidence and analyses that have become available, mostly in the last five years.
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Deficiencies in the analyses of urban enterprise zones that have focused on employment impacts have been ably inventoried by Vidal (1995:181~: "At the most basic level, impact evaluation shortcomings include reporting jobs gained (or 'retained') without netting out job losses, or reporting net job change without establishing a link between employment changes and zone program elements.
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These include community development financial institutions and community development corporations. Vidal (1995)
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have evaluated community development corporations. Vidal focuses on five types of community development financial institutions: community development banks, bank-owned community development corporations, community development credit unions, community development loan funds, and microenterprise loan funds.
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It is therefore unknown whether they are more effective than urban enterprise zones in reducing joblessness in distressed central-city neighborhoods. One approach that future research might take to answer this question is to estimate the same type of fixed effects models that have been used to evaluate urban enterprise zones but allowing for employment shocks from both community development corporations and urban enterprise zones.~7 A final set of place-based initiatives defines "place" more broadly to include the entire metropolitan area.
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For example, an attractive option for getting inner-city workers to suburban jobs would be jitneys that would pick them up at transit stops along major cross-suburban routes and drop them off near their places of employment.~9 There is other evidence, some optimistic and some pessimistic, regarding the likely success of reverse-commuting programs. One criticism of these programs is that central-city residents would be unwilling to make the lengthy commutes required to get to available suburban jobs.
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These results are consistent with those of Ihlanfeldt (1992) , who found that job accessibility for less educated workers is at its maximum in the inner rather than the outer suburbs.
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If the incumbent households remain in these neighborhoods as previously excluded households move in, greater racial and economic integration will result, which will mitigate both spatial mismatch in the labor market and negative neighborhood effects. Realistically, however, white flight of some magnitude will occur, which may limit any integration that may result.20 Little research has been done on policies that may stem white flight from suburban neighborhoods.
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From page 238... ...
This suggests that achieving stable neighborhoods require not only stemming white flight but also encouraging whites to choose mixed neighborhoods. Ellen also found that the tendency of whites to leave racially changing neighborhoods and their reluctance to select mixed neighborhoods appear to be based not on pure prejudice but rather their belief that the
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These results show that increases in the percentage of the neighborhood's residents who are black have a stronger influence on the moving probabilities of owners in comparison to renters, owners with children in comparison to childless owners, and owners with children in public school in comparison to those with children attending private school. These results lend support to the use of guaranteed price floors and greater spending for public schools in changing neighborhoods, as recommended by Yinger's SNIP.23 SOCIAL AND ECONOMIC OPPORTUNITIES AND THE SYSTEM OF LOCAL GOVERNMENT The structure of local government may affect the linkages between residential location and opportunity outlined in the earlier discussion as well as the effectiveness and feasibility of the policies discussed above.
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From page 240... ...
His tables indicate that metropolitan areas with more elastic central cities generally have the following features relative to those with less elastic central cities: a higher percentage of the area's population is governed by the central city, there are fewer suburban governments, a smaller percentage of the area' s blacks and Hispanics live in the central city, both black and Hispanic dissimilarity indexes are lower, indicating less racial segregation at the neighborhood level, and schools are less segregated for both blacks and Hispanics. Rusk provides the following explanation for the tendency for metropolitan areas with more elastic central cities to be less racially segregated (1995~: "Does greater socioeconomic integration automatically flow from greater government unity?
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From page 241... ...
In addition, Jargowsky's (1997) results suggest that blacks experience worse neighborhood effects in metropolitan areas where housing segregation, once again measured by a dissimilarity index, is higher.25 The Impact of Fragmentation on Policy All three categories of policies outlined earlier for dealing with spatial variation in economic and social opportunities are affected by local government fragmentation.
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From page 242... ...
It is therefore important to sort out the relative importance of these alternative linkages between residential location and opportunities. Moreover, as noted above, few studies have modeled neighborhood effects and job accessibility together, which suggests that a large portion of the results reported in the literature may be biased by omitted variables.
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Bogart 1996 Enterprise zones and employment: Evidence from New Jersey. Journal of Urban Economics 40:198-215.
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:575-601. Crane, Jonathan 1991 The epidemic theory of ghettos and neighborhood effects on dropping out and teenage childbearing.
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Harrison, Bennett, Marcus Weiss, and John Gant 1994 Building Bridges: Community Development Corporations and the World of Employment Training. New York: Ford Foundation.
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. 1990 Job accessibility and racial differences in youth employment rates.
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New York: Praeger Publishers. Levitan, Sar A., and Elizabeth Miller 1992 Enterprise zones are no solution for our blighted areas.
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Quigley 1991 Labor market access and labor market outcomes for urban youth. Regional Science and Urban Economics 21(2)
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1995 Reintegrating disadvantaged communities in the fabric of urban life: The role of community development. Housing Policy Debate 6(1)
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and their failure to address the simultaneity between their endogenous variables and residential location. Thompson recognizes that simultaneity between labor force participation and job access may affect his results, but be believes the bias will be small, since the women in his sample have uniformly low earnings and household incomes, making it difficult for them to trade higher commuting costs for a more spacious home.
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17 This approach is complicated by the heterogeneity of community development corporation employment programs. They may fare more or less well relative to urban enterprise zones depending on the specifics of their programs.
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28 Evidence suggests that white flight from inner to outer suburban areas during the 1980s was as virulent as the white flight from central cities to inner suburban areas during the 1960s and 1970s (Ihlanfeldt, 1994)
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