From Rivers to Roads: Spatial Mismatch and Inequality of Opportunity in Urban Labor Markets of a Megacity

Eduardo Haddad and Ana Maria Bonomi Barufi

No 7-2016, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)

Abstract: The spatial mismatch between residential locations and jobs can be particularly relevant for low-skilled individuals. In this paper, we first explore such phenomenon from the perspective of the distance of the residence to the geographic concentration of jobs, and locational disadvantages of the urban form itself. Such unequal conditions in the labor market present a great challenge for the spatial sustainability of the multiple equilibria achieved simultaneously at the labor and the housing markets. We estimate the main aspects that influence wage differentials among individuals, focusing on the role of accessibility on labor market outcomes. We suggest the inclusion of geographical characteristics as instruments to deal with endogeneity problems that arise in the estimation of urban price models. Our strategy is based on the inclusion of a specific geographic/historic variable as instrument, namely the river shore access to the first school built by the Jesuits in São Paulo, the city’s founding location. Geography acted as a determinant of the location of the transportation infrastructure in the region, so that the road and rail networks in the city present a strong spatial correlation with pre-urban “waterways”. Nowadays, the vast majority of rivers and creeks are covered with asphalt and cement, and economic agents are practically unaware of their existence.

Keywords: geographic concentration of jobs; urban labor markets; wage differentials; instrumental variables; Sao Paulo (search for similar items in EconPapers)
JEL-codes: R10 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2016
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: FROM RIVERS TO ROADS: SPATIAL MISMATCH AND INEQUALITY OF OPPORTUNITY IN URBAN LABOR MARKETS OF A MEGACITY (2018)
Working Paper: From Rivers to Roads: Spatial Mismatch and Inequality of Opportunity in Urban Labor Markets of a Megacity (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:nereus:2016_007

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