Race, Space, and Labor Outcomes

What is the relationship between where people live, and where jobs are located? What are the resulting employment outcomes for minorities? According to Professor Steven Rafael of the Goldman School of Public Policy and Professor John Quigley, Economics, understanding the spatial mismatch between where racial minorities live and work can significantly impact and inform local, regional, and national public policy planning.

The spatial mismatch hypothesis was first proposed over forty years ago by the economist John Kain, who argued that racial segregation and employment decentralization patterns in America combined to create the spatial distance between where minorities lived and where they worked. Because suitable employment was geographically inaccessible to low-skilled, minority workers who lacked access to cars or public transit, high levels of poverty and unemployment became concentrated in inner-city neighborhoods. Even today, many cities remain racially segregated, and many minority groups remain isolated from employment opportunities.

To illustrate the correlation between minority job opportunities and public transportation, Professor Quigley described a recent study demonstrating how the construction of the Dublin-Pleasanton BART line resulted in greater employment opportunities within the immediate vicinity of the train station for low-income, minority workers living outside of the Dublin Pleasonton area. Interestingly, the original rationale for building the new line was to provide ease of access to jobs for high-income workers who lived within the neighborhood.

The forum concluded with a critical analysis of the Moving to Opportunity (MTO) experiments, a large scale, US Department of Housing and Development (HUD) funded study. The multimillion-dollar study was designed to test the hypothesis that moving individuals out of neighborhoods with high-concentrations of poverty would increase their probability of finding work. However, the study provided no statistically significant evidence to support those claims, the validity of which can impact national public policy decisions, such as whether and where to relocate the displaced survivors of Hurricane Katrina for example.

Professors Quigley and Rafael argued that a closer look at the MTO intervention revealed fundamental flaws in the design of the study, suggesting that the experiment did not have the statistical power to rule out the effect sizes demonstrated by the mismatch literature. In other words, because the intervention basically moved African Americans from extremely poor neighborhoods to those of the average poor black person, it was not a true intervention as proposed by the spatial mismatch literature.

Despite its flaws, a number of interesting and statistically significant findings did emerge from the MTO study. For example, relocating out of extremely poor conditions was shown to produce the same positive effect on the mental health of women and girls as taking anti-depressant medication. Researchers also found that girls responded more positively to such moves than boys. In general girls would perform better in school, whereas boys would be involved in greater incidences of trouble.