Employment availability for entry-level workers: An examination of the spatial-mismatch hypothesis in Chicago

One explanation for high unemployment rates and low earnings among African American and other low-wage inner-city workers is that these workers are geographically isolated from emerging employment centers. This argument, commonly known as the spatial-mismatch hypothesis rests on two assumptions. The first is that residents of inner-city high-poverty neighborhoods have fewer job opportunities available to them than do residents of other neighborhoods. The second is that this mismatch negatively affects employment outcomes. However, research on spatial mismatch has focused primarily on the relation between job opportunities and employment outcomes without first establishing the correlation between neighborhood residence and job availability. In this paper, we examine the relationship between neighborhood residence and job opportunities for neighborhoods in the city of Chicago and find that residents of African American neighborhoods have reduced access to jobs, whereas those residing in high-poverty neighborhoods are not necessarily faced with diminished opportunities. However, this reduced access to jobs has a smaller-than-expected effect on employment outcomes.