Car Ownership and the Labor Market of Ethnic Minorities

Pieter Gautier and Yves Zenou

No 3814, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We show how small initial wealth differences between low skilled black and white workers can generate large differences in their labor-market outcomes. This even occurs in the absence of a taste for discrimination against blacks or exogenous differences in the distance to jobs. Because of the initial wealth difference, blacks cannot afford cars while whites can. Car ownership allows whites to reach more jobs per unit of time and this gives them a better bargaining position. As a result, in equilibrium, blacks end up with both higher unemployment rates and lower wages than whites. Furthermore, it takes more time for blacks to reach their jobs even though they travel less miles. Those predictions are consistent with the data. Better access to capital markets or better public transportation will reduce the differences in labor market outcomes.

Keywords: ethnic minorities; spatial labor markets; multiple job centers; job search; transportation mismatch (search for similar items in EconPapers)
JEL-codes: D83 J15 J64 R1 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-11
New Economics Papers: this item is included in nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Journal of Urban Economics, 2010, 67 (3), 392-403.

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Related works:
Journal Article: Car ownership and the labor market of ethnic minorities (2010)
Working Paper: Car Ownership and the Labour Market of Ethnic Minorities (2008)
Working Paper: Car ownership and the Labor Market of Ethnic Minorities (2008)
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