Re‐assessing the Spatial Mismatch Hypothesis

David Card, Jesse Rothstein and Moises Yi

No 116, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We use detailed location information from the Longitudinal Employer‐Household Dynamics (LEHD) database to develop new evidence on the effects of spatial mismatch on the relative earnings of Black workers in large US cities. We classify workplaces by the size of the pay premiums they offer in a two‐way fixed effects model, providing a simple metric for defining “good” jobs. We show that: (a) Black workers earn nearly the same average wage premiums as whites; (b) in most cities Black workers live closer to jobs, and closer to good jobs, than do whites; (c) Black workers typically commute shorter distances than whites; and (d) people who commute further earn higher average pay premiums, but the elasticity with respect to distance traveled is slightly lower for Black workers. We conclude that geographic proximity to good jobs is unlikely to be a major source of the racial earnings gaps in major U.S. cities today.

Keywords: Mismatch; Segregation; Access to jobs (search for similar items in EconPapers)
JEL-codes: J20 R20 (search for similar items in EconPapers)
Date: 2025-10-31
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:102065

DOI: 10.21034/iwp.116

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