Does finding work come down to who you are, or where you live?
Laurent Gobillon, Thierry Magnac, Harris Selod, 19 March 2007
Local unemployment is seen as a key contributing factor in the riots that spread out of Paris to many low-income areas throughout France in 2005, and to similar events going back to the 1965 Watts riots in the US. The common conclusion drawn is that workers residing in distressed and isolated areas simply do not have enough job opportunities.
The authors of CEPR DP6198 and DP6199 focus on Paris to discover the effects of location on unemployment. They find that around 30% of the spatial disparities in duration of unemployment in Paris can be attributed to personal characteristics of workers, while around 70% can be attributed to characteristics of the local area.
Among the personal characteristics, nationality has the strongest effect with the rate of Africans and other non-European citizens finding employment between 45% and 66% lower than that of the French. Younger people, men and those without children experience shorter unemployment spells, as do those with a university degree.
It is the local area characteristics, however, that account for the majority of the disparities in unemployment across the regions of Paris. To explore further, the authors look at both segregation and access to jobs. Segregation (by education, occupation or nationality) can have a negative effect on employment in poorer areas through (i) deterioration of the employability of workers due to increased social problems, peer-group effects or lower quality of education, (ii) deterioration of social networks, so unemployed workers are less likely to come into contact with job opportunities through personal contacts, and (iii) discrimination by employers based on the residential location of candidates, known as "redlining", an issue receiving increasing attention in France.
Access to jobs can effect employment as (i) workers may not hear about job opportunities far from their residencies, (ii) the costs of search may prevent workers from seeking jobs in distant places, and (iii) employers may be reluctant to recruit employees with long commutes.
The authors find that, in Paris, neighbourhood segregation prevents unemployed workers from finding a job, while job accessibility has less impact.
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