Spatial Mismatch Hypothesis

Abstract

First formulated by Kain (1968), the spatial mismatch hypothesis states that, residing in urban segregated areas distant from and poorly connected to major centres of employment growth, black workers face strong geographic barriers to finding and keeping well-paid jobs. In the US context, where jobs have been decentralized and blacks have stayed in the central parts of cities, the main conclusion of the spatial mismatch hypothesis is that distance to jobs is the main cause of high unemployment rates and low earnings among blacks. The spatial mismatch literature has focused on race under the presumption that (inner-city) blacks are not residing close to (suburban) jobs, either because they are discriminated against in the (suburban) housing market or because they want to live near members of their own race. Most of this literature has focused on black workers, and it is only recently that the analysis has been extended to other minority workers, especially Hispanics.