Reassessing the Spatial Mismatch Hypothesis

Abstract

Using Longitudinal Employer-Household Dynamics data, we demonstrate several facts that are not consistent with the “spatial mismatch” hypothesis that residential segregation and uneven distribution of jobs limit Black workers' opportunities. We show that (a) there is no Black-White gap in the firm premium component of wages in an Abowd-Kramarz-Margolis wage decomposition; (b) there are both more jobs and more good jobs within commuting distance of Black than White workers; and (c) Black workers' commutes are shorter. We conclude that geographic proximity to good jobs is not a major source of racial earnings gaps in major US cities today.