The Geography of Opportunity and Unemployment: An Integrated Model of Residential Segregation and Spatial Mismatch

Abstract: This article combines the neighborhood effects and spatial mismatch frameworks into a single model explaining how geographic factors contribute to unemployment. Using National Longitudinal Survey of Youth (1979) data, I estimate a two‐step model that separately models the effects of segregation and spatial mismatch. The first model predicts educational attainment as a function of exposure to residential segregation as a youth. The second model predicts unemployment probability as an adult as a function of educational attainment and spatial mismatch. The empirical results show that segregation does have discernable effects on educational attainment for blacks, but not for whites. I also find that spatial mismatch affects unemployment probability for blacks, but such an effect is hardly present for whites. A partial equilibrium analysis using predictions from the models shows that large changes in either segregation levels or the central city/suburban distribution of the black population would yield only moderate decreases in unemployment probability for the black population overall. Yet despite small predicted effects, these results should be viewed with caution because the general equilibrium effects of a large scale movement of blacks and whites across metropolitan space are largely impossible to predict with current data.