David Neumark of UC Irvine, and Judith Hellerstein and Melissa McInerney of Maryland find that “racial mismatch” affects low-skill employment ["Spatial Mismatch or Racial Mismatch?," NBER W1361]:

Race, not space, key to lower black male employment rate, Today@UCI: A new study finds that in areas where low-skilled jobs are predominantly held by whites, black men who live nearby are less likely to get hired.

“The problem is not lack of jobs at appropriate skill levels where blacks live, but lack of jobs available to blacks,” said UC Irvine economist David Neumark, co-author of the study.

For years, it’s been widely accepted that space is a primary barrier to employment – meaning there are not enough low-skilled jobs where less-skilled black workers live. But by analyzing the employment, education level and location of more than 533,000 black males across the United States, Neumark and his colleagues found that the issue is not simply whether jobs are available nearby, but whether they are available to one’s own race.

“It’s an exaggeration to say blacks don’t live where the jobs are,” said Neumark. “In reality, there are many jobs held by non-blacks in areas where blacks live – including at lower education levels.”

And the greater the proportion of those jobs that are held by whites, the lower the chance the local blacks will get hired into those jobs.

“The jobs simply are not available to their race,” Neumark added.

The study does not answer the question of why this happens, but the researchers suggest discrimination or lack of labor market networks are likely causes.

Jobs for low-skilled workers are often advertised informally through word of mouth in social networks, such as among friends or church members, Neumark explained. In many communities, this means that blacks may not have good information about job openings in businesses employing mainly whites.

Neumark and his colleagues call this effect “racial mismatch,” a new spin on the term “spatial mismatch,” which has been used to describe the lack of the right jobs in the right place.

Recently, programs like “Wheels to Work” and “Moving to Opportunity” have emphasized getting the workforce to the appropriate jobs by providing transportation or relocation. But when Neumark and his colleagues ran a simulation based on their data, they found that eliminating location differences between blacks and whites would only close the racial employment gap for low-skilled individuals by 10 to 15 percent.

“That’s not a significant improvement in employment,” Neumark said. “Policies focused on getting people to the jobs miss the bigger barriers facing low-skilled blacks.”