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So you want a job? You’d better be in the right neighborhood

For 29 years now, Paul Solman’s reports on the NewsHour have been trying to make sense of economic news and research for a general audience. Since 2007, our Making Sen$e page has striven to do the same, turning to leading academics and thinkers in the fields of business and economics to help explain what’s interesting and relevant about their work. That includes reports and interviews with economists affiliated with the esteemed National Bureau of Economic Research.

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Founded in 1920, NBER is a private nonprofit research organization devoted to objective study of the American economy in all its dazzling diversity, combining data with rigorous analysis to describe and explain the material world in which we live long before data analytics became fashionable. “Why Some Women Try to Have It All: New Research on Like Mother Like Daughter” and “Why Does the First Child Get the Gold? An Economics Answer” have been among our most popular posts on Making Sen$e, both of them largely based on NBER research. We thought our readership might benefit from a closer relationship.

Each month, the NBER Digest summarizes several recent NBER working papers. These papers have not been peer-reviewed, but are circulated by their authors for comment and discussion. With the NBER’s blessing, Making Sen$e is pleased to begin featuring these summaries regularly on our page.

This is our last summary from September’s Digest. See previous posts from this month on why Wall Street is becoming more bipolar, the economic advantages to benefit increases, generic drug prices, and why Manhattanites sell their mansions for less than $1 million.

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.

Les Picker, National Bureau of Economic Research

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