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Governance and Opportunity in Metropolitan America (1999)

Chapter: The Geography of Economic and Social Opportunity in Metropolitan Areas

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Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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The Geography of Economic and Social Opportunity in Metropolitan Areas

Keith R. Ihlanfeldt

Georgia State University

Much has been written lately concerning the "geography of opportunity," which most commonly means that "where individuals live affects their opportunities and life outcomes" (Rosenbaum, 1995:231). Although this is certainly not a new idea (see, for example, Kain and Persky, 1969), it has received a revival of interest as the result of the writings of William Julius Wilson (1987, 1996). Wilson maintains that an urban underclass population has grown rapidly in central-city ghettos as the result of an erosion in economic opportunities in these areas and the exodus of working-class and middle-class blacks to better neighborhoods. More generally, there is concern that a continuing high level of racial segregation and increasing income segregation in metropolitan area housing markets have increased the proportion of poor people residing in "bad" neighborhoods, in the sense that the latter offer poor proximity to available jobs, inferior schools, and negative neighborhood effects.1 If the geography of opportunity has indeed worsened over time for less educated and minority households, this may help to explain growing income inequality among racial and educational groups documented at the national level (Levy and Murnane, 1992).

The purposes of this paper are fourfold. First, I review what is known about the relationships between residential location and the economic and social prospects of individuals. Location both in and among metropolitan areas is considered. Second, policy solutions to unequal spatial opportunities are reviewed in light of considerable new evidence that has surfaced in recent years. Third, scholars have generally overlooked the role that the system of local government may play in influencing the residential location/opportunity nexus; the effects of local government fragmentation on the latter as well as on possible policy solu-

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

tions are discussed. Finally, since there are major gaps in knowledge in all three of the above areas, suggestions are made regarding future research needs.

Spatial Inequality in Economic Welfare

Before considering the hypothesized links between residential location and opportunities, some documentation of the spatial inequalities that these links purport to explain is in order. Table 1 reports unemployment rates and rates of nonparticipation in the labor force for central-city and suburban residents, respectively; Table 2 shows real median family income for these areas.

Unemployment rates were only slightly higher among central-city residents for both blacks and whites in comparison to their suburban counterparts in 1970. However, unemployment rate differences between central-city and suburban residents grew during both the 1980s and the 1990s for both racial groups, but this growth was more than four times greater for blacks than whites. In 1990 unem-

TABLE 1

Unemployment Rates and Nonparticipation Rates Inside and Outside Central Cities of Metropolitan Statistical Areasa

 

Inside Central Cities

Outside Central Cities

 

1970

1980

1990

1970

1980

1990

Unemployment Rate

All races, both sexesb

4.7

7.3

7.8

3.9

5.7

5.0

White, both sexes

4.1

5.7

5.7

3.7

5.4

4.5

Male

3.8

5.9

6.0

3.2

5.3

4.6

Female

4.4

5.4

5.4

4.5

5.4

4.4

Black, both sexes

6.9

12.8

14.4

6.4

9.6

9.5

Male

6.7

13.9

15.9

5.8

9.7

9.8

Female

7.3

11.7

13.2

7.2

9.4

9.1

Rate of Nonparticipation in Labor Force, Workers Aged 25-64c

All races, both sexesb

30.0

26.6

22.3

30.8

25.6

19.2

White, both sexes

29.6

25.6

20.3

30.8

25.7

19.7

Male

8.6

11.6

11.8

6.0

8.9

9.4

Female

49.0

39.0

28.7

54.5

41.9

29.8

Black, both sexes

30.0

28.9

27.0

29.4

23.6

21.0

Male

14.3

20.2

22.6

15.7

16.3

18.9

Female

42.9

35.7

30.6

41.8

30.2

23.0

a Update of Table 11.6, p. 293, Urban Economics and Public Policy by James Heilbrum, St. Martin's Press, 1987.

b "All races" includes white, black, and others not shown separately.

c Rate of nonparticipation equals the number of persons not in the labor force divided by the total population for the designated age group.

Sources: U.S. Bureau of the Census, Census of Population: General Social and Economic Characteristics, 1970, Tables 107, 112, 124, and 126; 1980, Table 144; 1990, Tables 33, 69, and 70.

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

TABLE 2

Median Family Income by Race Inside and Outside Central Cities of Metropolitan Statistical Areasa

 

Median Family Incomeb (1985 Dollars)

 

1959

1969

1979

1989

1995

Central Cities

All racesc

21,752

27,515

26,801

26,655

24,292

White

23,112

29,472

29,560

30,538

27,303

Black

14,193

19,245

17,183

16,716

16,373

Outside Central Cities

All racesc

24,490

32,417

33,992

35,431

33,648

White

24,886

32,895

34,556

37,871

34,315

Black

12,853

20,298

22,294

25,010

24,164

a Update of Table 11.7, p. 294, Urban Economics and Public Policy by James Heilbrum, St. Martin's Press, 1987.

b Income in the year shown for families by place of residence in the following year.

c Includes other races not shown separately.

Sources: U.S. Bureau of the Census, Current Population Reports, series P-23, no. 37, June 24, 1971, Table 7; series P-23, no. 75, November 1978, Table 17; series P-60, no. 180, November 1992, Table 13; series P-60, no. 193, October 1996.

ployment rates were 4.9 and 1.2 percentage points higher in central cities for blacks and whites, respectively. The central-city unemployment rate was especially high for black males (16 percent).

Rising central-city unemployment rates may illustrate only a portion of the labor market disadvantage associated with a central-city location, since many blacks living in central cities are believed to be "discouraged workers" (i.e., workers who have become so discouraged by their inability to find work that they dropped out of the labor force entirely). Discouraged workers are not counted as being unemployed, because they have stopped searching for work. The rates of labor force nonparticipation, which capture discouraged workers but also those with other reasons for not looking for work, tell a similar story to that of unemployment rates, i.e., there has been little change in the nonparticipation rate difference between whites living in central cities and suburbs, whereas there have been substantial increases in the nonparticipation rates of both central-city black males and black females relative to their suburban counterparts. Finally, as was true for unemployment and nonparticipation rates, there has been a growing gap in real median family income between central-city and suburban residents over time (for income the data cover a longer period, 1959-1995). Although the growth in the gap in dollar magnitude was comparable between whites and blacks, due to the lower average income of blacks the central city-suburban income

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

difference in percentage terms was roughly twice as large for blacks as whites in 1995.

In summary, regardless of the indicator, spatial differences are becoming greater over time for both blacks and whites living in metropolitan areas. But for blacks these differences have grown much more rapidly. The observed growth in spatial differences may reflect two possible phenomena: (1) the labor market outcomes for central-city residents may be worsening relative to those of suburban residents and (2) people with better labor market outcomes may be choosing with greater frequency a suburban over a central-city residential location. Since the data presented in Tables 1 and 2 are consistent with both of these possible scenarios, they suggest but do not demonstrate the existence of a causal link between residential location and opportunity.

Residential Location and Opportunity: the Links

Numerous specific hypotheses relate residential location either in or among metropolitan areas to the opportunities and life outcomes of individuals; however, these purported linkages share two assumptions: (1) that there are spatial variations in the resources offered by markets and/or institutions in or across metropolitan areas and (2) that households have unequal ability to reside in locations where they deem these markets and institutions to be most desirable (Galster and Killen, 1995). The various hypotheses that link location and social and economic prospects differ in that they focus on different markets and/or institutions. They can also be distinguished by whether they focus on intraversus intermetropolitan location. In this section, these hypotheses are first stated and discussed. The empirical evidence related to each hypothesis is then reviewed with an eye toward identifying conclusions for which there seems to be some agreement. Hypotheses dealing with the relationship between intrametropolitan location and opportunity are considered first, followed by those that relate opportunity to intermetropolitan location.

The Spatial Mismatch Hypothesis

Certainly, the most researched hypothesis relating intrametropolitan location to economic opportunity is commonly labeled the "spatial mismatch hypothesis." This hypothesis states that the suburbanization of jobs and involuntary housing market segregation have acted together to create a surplus of workers relative to the number of available jobs in central-city neighborhoods where blacks are concentrated. The spatial mismatch hypothesis, which was first advanced by John Kain way back in 1968, has recently enjoyed a comeback after many years of dormancy. The revival of interest in it can be attributed to a number of factors (Ihlanfeldt, 1994), but probably the most important is Wilson's (1987) and Kasarda's (1989) emphasis on job decentralization as a causative factor in the

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

growth of the underclass.2 As mentioned above, a common element of all hypotheses that relate residential location to opportunity are the assumptions that resources are spatially nonuniform and residential mobility is differentially constrained. In the case of the spatial mismatch hypothesis as originally formulated, the resource that varies is job accessibility, and the residential mobility constraint is the inability of blacks to follow jobs to the suburbs because of racial discrimination in the suburban housing market. However, Ihlanfeldt and Sjoquist (1989) have argued that spatial mismatch may also affect the labor market opportunities of low-skilled white workers, since they too are constrained in their ability to follow jobs to the suburbs by a relative scarcity of affordable housing units in those suburban areas where job growth is occurring.3

The surplus of workers in central-city neighborhoods that results from spatial mismatch may reduce the economic welfare of these workers by making it more difficult to find work, by reducing wage rates in the central city relative to suburban areas, or by increasing commuting costs. All of these possible effects, which may occur alone or in combination, translate into the same outcome—namely, lower net annual earnings for central-city blacks and less educated whites.

From a policy perspective, an important issue is why spatial mismatch would persist in the long run. Spatial mismatch implies a labor market disequilibrium that should be eliminated by market forces. Although racial discrimination in the housing market and high suburban housing costs may permanently keep less educated workers from residentially relocating to the suburbs, disequilibrium can still be eliminated by either labor demand increases in the central city or by workers shifting their labor supply to the suburbs by making a reverse commute. However, both of these adjustment mechanisms may be short-circuited. Regarding the former mechanism, it is frequently argued that the relative magnitudes of taxes, insurance premiums, land costs, skilled workers' wages, and congestion diseconomies may work against businesses selecting a central-city location, even if low-skilled labor costs are lower there than elsewhere due to spatial mismatch. The reverse-commuting mechanism may fail to work for a wide variety of reasons. These include the time and out-of-pocket costs associated with the commute, the possibility that central-city workers do not have knowledge of suburban job openings, greater hiring discrimination in the suburbs, the physical inaccessibility of many suburban job sites by public transit, and blacks' anticipation of being mistreated by suburban whites.

Neighborhood Effects

Under the rubric of "neighborhood effects" falls a variety of mechanisms that link the neighborhood milieu to individual behaviors and opportunities. The nature of these mechanisms are the subject of considerable debate among social scientists. The purpose here is not to provide an exhaustive review of this debate

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

but rather to highlight those channels of neighborhood influence that seem most plausible and susceptible to policy intervention.

One list of possible neighborhood effects is provided by Jencks and Mayer (1990b) in their survey of the empirical literature. Their list includes peer influences, indigenous adult influences, and outside adult influences.

Peer influences refer to the effects that peers have on one another's behavior. To be accepted by one's peer group, the individual adopts the same behaviors, whether good or bad, that characterize the group. Since behaviors considered "bad" according to establishment norms are more prevalent in poor neighborhoods, individuals living in such neighborhoods are more likely to be induced by peers to engage in self-destructive or antisocial activity. The individual's susceptibility to peer group effects is believed to vary with age, with young people, especially teenagers, being most at risk.

Indigenous adults in the neighborhood may also affect individual behaviors by serving either as role models or "enforcers" of public order and decency. Once again, the nature of these effects is thought to vary between poor and affluent neighborhoods, with the former containing fewer positive role models and involved enforcers of community standards.

Among the neighborhood effects identified by Jencks and Mayer, it has been this particular type of effect—the influence of indigenous adults—that has received the most attention in policy discussions. This does not stem from any evidence regarding the strength of this effect relative to others, but rather from the influential writings of Wilson (1987), who argues that the migration of working-class and middle-class blacks from ghettos has left these areas without mainstream role models. He believes that the resulting concentration of poverty has played an important role in the growth of social pathologies in the black community. In addition to serving as role models, Wilson emphasizes that middle-class blacks are the chief supporters of mainstream institutions, such as churches and schools. As successful people have left the ghetto, these neighborhood institutions have undergone a severe deterioration in quality.

The final neighborhood effect identified by Jencks and Mayer is adults living outside the neighborhood who may indirectly influence behaviors and opportunities in the neighborhood. This presumably occurs as the result of more qualified providers of public services preferring to work in better neighborhoods. Hence, this factor may contribute to other possible causes, resulting in the inferior schools, police forces, and other neighborhood institutions found in poorer neighborhoods. Of course, privately provided goods and services in poorer neighborhoods may suffer in quality for this reason as well.

In addition to the neighborhood effects listed by Jencks and Mayer, there are two other possibly important linkages that can be mentioned. First, results from the Gautreaux program (Rosenbaum, 1995) suggest that many ghetto and public housing residents may be unwilling to work out of fear that they will be victimized while traveling to and from work, robbed of their rewards from working, or

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

their unsupervised children will get hurt or get in trouble with gangs. (The Gautreaux program is reviewed in the next major section.) Second, informal sources of job market information, which are heavily relied on by less educated workers in searching for jobs (Holzer, 1987), may vary in quality between good and bad neighborhoods. Wilson (1987) argues that people living in underclass neighborhoods have poor information about legitimate jobs because they lack contact or interaction with individuals and institutions that represent mainstream society. I have argued (Ihlanfeldt, 1997) that Wilson's hypothesis can be couched in terms of the decision to invest in the acquisition of labor market information. In underclass neighborhoods, fewer people make the investment in information about jobs because fewer people choose to participate in the labor force. There is therefore a lower probability that one's neighbors will have accurate information to share on the spatial distribution of available jobs. However, the influence of neighborhood is more complicated than Wilson's hypothesis suggests. Although labor force participation is lower in underclass neighborhoods, among those who do participate there is likely to be a greater investment in obtaining information about jobs that less educated people would be qualified to hold. In affluent neighborhoods, there may collectively be a dearth of information on these types of jobs, simply because the typical resident has some postsecondary education and is employed where few workers are hired into blue-collar or service occupations. It is therefore unclear whether less educated people obtain more useful information about the labor market from their neighbors if they live in better (i.e., more affluent) neighborhoods.

The attention that social scientists have given to these neighborhood effects has increased in recent years, since decennial census data indicate that poor people are increasingly isolated from nonpoor people in metropolitan areas. For example, Abramson et al. (1995) found that poor households became 13 percent more segregated from 1970 to 1990 in the 40 largest metropolitan areas, and Kasarda (1993) shows that in the 100 largest cities the share of the poor living in tracts with a poverty rate over 40 percent increased from 16 to 28 percent over this same time period. The growth in the likelihood that an individual poor person has mostly poor neighbors suggests that negative neighborhood effects are having a greater influence on the opportunities and life outcomes of poor people today than was true in the past (Wilson, 1987).

Educational Opportunity

As alluded to above, all of the neighborhood effects identified by Jencks and Mayer—peer influences, indigenous adult influences, and outside adult influences—may cause differences in educational opportunities between poor and nonpoor neighborhoods. Peer influences may act to reduce learning opportunities in poor neighborhoods by depriving poor students of the possible benefits of being surrounded by smart and motivated students. The adults who reside in poor

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

neighborhoods may devote less time and money toward the support of neighborhood schools and the enforcement of antitruancy laws. Finally, poor neighborhoods may repel more qualified teachers and school administrators.

In addition to educational differences arising from neighborhood effects, educational opportunities may also vary across school districts due to interdistrict fiscal disparities. These disparities are particularly severe between central cities, where the poor are concentrated, and white suburban areas (Bahl, 1994). Moreover, there is evidence that these disparities have grown worse over the past decade (Bahl et al., 1992). The conventional wisdom is that resources spent on education have little effect on observed educational outcomes (Hanushek, 1986), but Card and Krueger (1996) have questioned this conclusion in their recent review of the empirical literature. They note that several meta-analyses—quantitative summaries of the estimates in the literature—suggest that greater resources do in fact lead to higher test scores. More important, they conclude that school resources positively affect long-term outcomes like educational attainment and earnings.

Intermetropolitan Location and Opportunity

In comparison to the linkages that may exist between intrametropolitan location and opportunities, possible effects of intermetropolitan location on opportunity have received far less attention. Nevertheless, a number of new theories suggest that the economic and social prospects of specific groups may vary among metropolitan areas due to differences in growth rates or levels of housing segregation.

Local shifts in labor demand that disturb the steady-state relationship among the unemployment rates of metropolitan areas may cause intermetropolitan differences in the employment and earnings opportunities of indigenous residents. However, the conventional wisdom has been that these differences would be eliminated in the long run because immigration returns all areas to equilibrium. However, Bartik (1991) argues that increases in local labor demand may have beneficial long-run effects on the human capital of indigenous workers, since growth may cause firms to promote their workers to higher-paying jobs more rapidly. Growth may also shorten unemployment durations among local residents, decreasing the likelihood that their human capital will be eroded by inactivity. If blacks or poor people are concentrated in slower growth areas, these so-called hysteresis effects may play a role in explaining the growth in income and racial inequality at the national level.4

Neighborhood effects and spatial mismatch imply that blacks living in segregated areas are worse off than blacks living in integrated or predominately white areas. Cutler and Glaeser (1995) have espoused the idea that housing segregation hurts all blacks equally in the same metropolitan area whether they live inside or outside the ghetto. They label their idea "the weak form of the spatial mismatch

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

hypothesis'' (1995:3): ''This form of the hypothesis does not specify the mechanism relating segregation to poor outcomes, and does not assume that black mobility is constrained. With unconstrained mobility, we would expect outcomes for equivalent people to be equalized across locations in a single city, so that all minorities regardless of location will be hurt by segregation." Cutler and Glaeser's version of the spatial mismatch hypothesis implies that the welfare of blacks residing in more segregated metropolitan areas is worse in comparison to those living in less segregated areas, other things being equal.

Evidence on the Spatial Mismatch Hypothesis

More than 60 studies have provided evidence on the spatial mismatch hypothesis. In the early 1990s, six different reviews of the literature were published (Wheeler, 1990; Jencks and Mayer, 1990a; Moss and Tilly, 1991; Holzer, 1991; Kain, 1992; Ihlanfeldt, 1992). With the exception of Jencks and Mayer, these reviews concluded that the weight of the empirical findings provided either strong (Kain, Ihlanfeldt) or moderate (Wheeler, Moss and Tilly, Holzer) support for the hypothesis. Jencks and Mayer, in contrast, concluded that "support [for the idea that job proximity increases the supply of black workers] is so mixed that no prudent policy analyst should rely on it" (1990a:19).

Since the above reviews were written, roughly a dozen new studies have been completed in this area. In general, these studies use more suitable data and superior methodologies than earlier studies and therefore provide the most reliable evidence to date on the spatial mismatch hypothesis. Since Ihlanfeldt and Sjoquist (1998) have already provided a detailed review of each of these new studies, the approach here will be twofold: (1) to summarize the results of these studies and (2) to highlight a couple of studies that provide particularly noteworthy evidence on the spatial mismatch hypothesis.

Of the new studies providing evidence, only two reject the hypothesis (Taylor and Ong, 1995; Cooke, 1997). However, neither of these studies deals with the endogeneity of residential location, which is the most common methodological error that has plagued empirical investigations of the spatial mismatch hypothesis (Ihlanfeldt, 1992). The hypothesis implies that job accessibility affects labor market outcomes, but both the standard theory of residential location (Muth, 1969) and existing evidence (Ellwood, 1986) indicate that commuting distances rise with earnings.5 Hence, earnings and proximity to jobs are jointly determined. The failure to account for this simultaneity results in the underestimation of the true effect of job accessibility on labor market outcomes (Ihlanfeldt, 1992).

One approach to handling the simultaneity between employment/earnings and residential location is to focus the analysis on youth. still living at home, based on the assumption that for them residential location is exogenously determined by their parents or guardians. The convenience of this approach explains why so many studies of spatial mismatch have focused exclusively on youth.

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

Among recent studies, Cutler and Glaeser (1995), Holzer et al. (1994), Holloway (1996), O'Regan and Quigley (1996), and Raphael (1998a, 1998b) reinforce the earlier finding of Ihlanfeldt and Sjoquist (1990) that job accessibility has an important effect on the probability that youth have jobs.

In his assessment of the spatial mismatch literature in 1992, Kain concluded that most studies of spatial mismatch have focused on males and that more research was needed on females. Two of the recent studies have responded to this need by providing estimates for females (Thompson, 1997; Kasarda and Ting, 1996). Kasarda and Ting find that spatial mismatch has a stronger effect on the joblessness of women than men, regardless of race. They suggest that this may reflect women's more complex travel patterns and greater domestic responsibilities, both of which make them less able to commute to distant jobs. Although Thompson focuses exclusively on females and therefore provides no gender comparisons, his results are consistent with those of Kasarda and Ting's, in that he finds that job access strongly affects the labor force participation rates of white, black, and Hispanic women.6

As noted above, spatial mismatch may affect the employment and earnings of less educated whites as well as blacks. The findings of Holloway (1997), Kasarda and Ting (1996), and Ihlanfeldt and Young (1994) all lend support to this expectation. The last study is of particular interest, since it provides some rare evidence on differences in wage rates between workers employed by central-city and suburban firms. As predicted by the hypothesis, the wage rates of both black and white fast-food restaurant workers are found to be significantly greater in the suburbs than in the central city, after controlling for a lengthy list of individual and establishment characteristics.

Among the recent studies, those by Raphael (1998b) and Rogers (1997) merit special consideration. Using 1990 census tract level data for San Francisco, Raphael regresses male youth employment to population ratios on a set of geographically defined job accessibility measures, a geographically defined competing labor supply variable, and variables describing the demographic composition of the neighborhood. This approach follows the basic methodology employed earlier by Ellwood (1986) and Leonard (1986). The latter two studies have played a major role in the spatial mismatch debate because each finds that racial differences in youth employment rates have little to do with job accessibility.7 The distinguishing characteristic of Raphael's model is that his access measure, which is obtained by estimating a gravity equation, is based on the change in jobs rather than the number of jobs in a specified commute of each census tract. He persuasively argues that proximity to employment growth comes closer than proximity to employment levels to the ideal measure of job accessibility, namely, the number of job openings per worker.

The estimated effects of his job access variables have the expected signs and are highly significant. Moreover, contrary to the results of Ellwood and Leonard, when Raphael adds his job access variables to an equation that includes the

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

proportion of the census tract's residents who are black, the coefficient on the latter variable falls precipitously. Differential accessibility is found to explain between 30 and 50 percent of the neighborhood employment rate differentials between average white and black male youth. It is remarkable that this range is nearly identical to the one found earlier by Ihlanfeldt and Sjoquist (1990) using 1980 data for Philadelphia.

Raphael presents other results that may go a long way toward resolving the spatial mismatch debate, at least as it applies to youth. When he reestimates his models using Ellwood's and Leonard's employment level-based measures of job accessibility, he reproduces their insignificant results.

Rogers analyzes the relationship between unemployment duration and job accessibility. This study is unique in that her data allow her to address the simultaneity problem between employment and residential location using a sample of males ages 18 to 55 residing in the Pittsburgh area who have submitted unemployment insurance claims. Hence, the results of this study provide some rare and seemingly reliable evidence on the spatial mismatch hypothesis as it applies to the employment of adults. She argues that simultaneity is not a problem for her sample because the residential location of laid-off workers is based on previous job location. Her measures of job access are essentially the same as those employed by Raphael; that is, gravity variables that measure either the worker's proximity to employment change or employment levels. Also consistent with Raphael are her findings that indicate employment change-based measures of access have a statistical effect on unemployment duration, whereas employment level-based measures do not. An increase of one standard deviation in the mean value of her access to job growth variable is found to decrease expected unemployment duration by about five weeks.

In summary, there is now rather convincing evidence that job accessibility plays an important role in explaining the large differences that exist in the employment rates of black and white youth living in large metropolitan areas. Even Jencks and Mayer (1990a) and later Jencks (1992) alone concede this point in their otherwise critical review of the spatial mismatch literature, and this review was written prior to the excellent studies by Raphael (1998a, 1998b).

But what can be concluded concerning the role that spatial mismatch plays in explaining racial differences in youth employment rates in smaller metropolitan areas? These differences are only modestly smaller than those for larger metropolitan areas (Ihlanfeldt, 1992). Unfortunately, none of the recent studies reviewed above addresses this issue. In fact, among all studies, only Ihlanfeldt (1992) provides separate estimates for metropolitan areas of different population sizes. These results suggest that the importance of job access as both a determinant of youth job probability and as an explainer of racial employment gaps is directly proportional to metropolitan area size. In fact, essentially no importance is found for metropolitan areas of less than 1 to 1.5 million people.

As noted above, due to the simultaneity problem between employment/earn-

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

ings and residential location, it is much more difficult to test the spatial mismatch hypothesis for adults than youth. However, the studies by Thompson and by Rogers appear to adequately handle this difficulty, and their results suggest that spatial mismatch plays some role in explaining the labor market outcomes of adult women and men, respectively, living in large metropolitan areas. Many earlier studies also reach this conclusion (see the reviews of the spatial mismatch hypothesis literature cited above), but the evidence provided by these studies is less convincing due to weaker data and/or methodologies (Ihlanfeldt, 1992).

The role played by spatial mismatch in explaining the employment and earnings of adults living in smaller metropolitan areas has not been studied. But since adults may be more able than youth to overcome poor job accessibility, the insignificant results found by Ihlanfeldt (1992) for youth in smaller areas suggest that spatial mismatch may be strictly a large-city phenomenon.8

The Perpetuation of Spatial Mismatch

As first noted by Holzer et al. (1994), it is exceedingly important from a policy perspective to identify the barriers that prevent blacks from shifting their labor supply to suburban areas in response to spatial mismatch. Until very recently, this issue was ignored in the spatial mismatch hypothesis literature. There are now two published studies that provide some evidence.

Ihlanfeldt and Young (1996) use data from a sample of fast-food restaurants in Atlanta to examine the factors that underlie the spatial distribution of black employment between the central city and the suburbs. A model of the racial composition of the restaurant's workforce was estimated that included the following explanatory variables: percentage of white customers, race of manager, whether the restaurant was in walking distance of a public transit stop, miles from the central business district center (a proxy for distance from black residences), chain affiliation, and whether the establishment was franchisee- or company-owned. Of these variables, transit was the most important factor in explaining the lower share of jobs held by blacks in the suburbs. A total of 35 percent of the city-suburban difference in black employment share could be attributed to the tendency of suburban firms not to be in walking distance of public transit. Other important contributors to the city-suburban difference in black employment share were miles from the central business district center (33 percent), race of manager (15 percent), and percentage of white customers (14 percent). These results suggest that the physical inaccessibility of suburban job sites by public transit, the length of the commute (which may proxy either commuting costs or information on job opportunities), and labor market discrimination all represent important barriers preventing blacks from securing suburban jobs.

Holzer and Ihlanfeldt (1996) also investigated the factors that explain the racial composition of the workforce of the individual firm. However, their analysis is based on relatively large (roughly 800 observations per city) and represen-

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

tative samples of firms located in Boston, Atlanta, Los Angeles, and Detroit. Based on estimated equations of the probability that the last worker hired by the firm is black, they decompose central-city/suburban differences in black employment probabilities into the portions accounted for by each explanatory variable. Their results, which strongly parallel those of Ihlanfeldt and Young (1996), indicate that a number of factors play an important role in explaining the lower probability of blacks obtaining suburban in comparison to central-city jobs. These include the tendencies of suburban firms to be located beyond walking distance of a public transit stop, to have mostly white customers and owners, and to be located far away from black residences. Regarding the mechanism underlying the latter effect, they find that distance to black residences has a statistically significant and negative effect on black employment for all recruiting methods (signs, walk-ins, referrals), except for newspaper advertisements. Since newspapers disseminate information over a wider geographical area than the other methods, these results suggest that the distance effect may be attributable to central-city blacks possessing poor information about suburban job openings.9

More direct evidence on the possibility that information limits black employment in suburban areas is provided by Ihlanfeldt (1997). As part of the Multi-City Study of Urban Inequality (MCSUI) Household Survey for Atlanta, respondents were asked to look at a map identifying six major employment centers in the Atlanta region and indicate which centers they felt had the fewest and most job opportunities or openings for people without college degrees. Using job vacancy data from the MCSUI employers survey as well as other data, Ihlanfeldt was able to accurately rank the centers based on jobs available for less educated workers. He found that both black and white respondents have very poor knowledge of the spatial distribution of job openings, particularly if they lived in the city of Atlanta. Even among those workers who presumably had the most to gain from acquiring such information—the unemployed with little education—there was a large divergence between actual and perceived rankings.

Evidence on Neighborhood Effects

The effects that neighborhood characteristics have on individual behaviors and opportunities are extremely difficult to estimate reliably. The same problem that has plagued empirical investigations of the spatial mismatch hypothesis—namely, endogenous residential location—confronts with even greater severity empirical studies of neighborhood effects. People who behave in ways that society deems undesirable may self-select bad neighborhoods, either because they prefer to live among others like themselves or because the housing in such neighborhoods is all they can afford. There is therefore always the concern that effects that are attributable to neighborhoods may simply reflect unmeasurable characteristics of individuals or families who end up living in the poorest neighborhoods.

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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The most comprehensive review of the empirical literature on neighborhood effects is by Jencks and Mayer (1990b). They conclude that "our first and strongest conclusion is that there is no general pattern of neighborhood or school effects that recurs across all outcomes." Regarding specific outcomes, they conclude that the evidence is contradictory and sometimes thin in the areas of educational attainment, cognitive skills, crime, and labor market outcomes. To Jencks and Mayer, the only outcome for which the evidence appears to unambiguously support a neighborhood influence is teenage pregnancy. The reader's impression of the neighborhood effects literature after reading the Jencks and Mayer review is perhaps best expressed by Jencks (1992:138) himself: "Indeed, the list of what we don't know [about neighborhood effects] goes on and on."

Since the Jencks and Mayer review was written, many new studies have been completed that provide evidence that neighborhood effects matter (Crane, 1991; Massey et al., 1991; Corcoran et al., 1992; Case and Katz, 1991; O'Regan and Quigley, 1991; Brooks-Gunn et al., 1993; O'Regan, 1993; Brewster, 1994; Duncan, 1994; Haveman and Wolfe, 1994; Brooks-Gunn et al., 1997). Among these studies, the evidence of Case and Katz is the most convincing, since they explicitly model the possibility of endogenous residential location. Their data come from the 1989 Boston Youth Survey of the National Bureau of Economic Research. For 17- to 24-year-olds they model the following behaviors: criminal activity, illegal drug use, alcohol use, church attendance, idleness (neither working nor in school), friendship with gang members, and parenthood outside wedlock. For all of these behaviors except the last two, they find that the youth's involvement is dependent on the extent to which other youth in the neighborhood evince the same behavior. Case and Katz interpret their results as consistent with the epidemic or contagion model of neighborhood effects, which posits that bad behaviors are spread through peer influence. They conduct a number of sophisticated econometric tests to rule out the possibility that the neighborhood effects they find are just an artifact of the way families sort themselves among communities.

Also new since the Jencks and Mayer review are two papers that highlight the difficulty of reliably estimating neighborhood effects because of the endogeneity of residential location. Evans et al. (1992) show that, if this endogeneity is ignored, teenage women's probability of pregnancy and dropping out of school strongly depends on the quality of their school peer group, measured as the percentage of students who are disadvantaged. However, their results obtained from models that treat residential location as endogenous provide no support for the existence of peer group effects. Manski (1993) theoretically demonstrates the highly restrictive conditions that must obtain before endogenous neighborhood effects can be identified. He believes that satisfying these conditions is so tenuous in statistical models that experimental and subjective data (i.e., statements people make about why they behave as they do) will

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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have to play an important role in future efforts to learn about neighborhood effects.

As is true for the spatial mismatch hypothesis, little is known about neighborhood effects outside large metropolitan areas. However, the results from existing studies may be more applicable to smaller areas with regard to neighborhood effects than spatial mismatch. Neighborhood effects are believed to be highly localized, whereas reachable jobs may extend considerable distances beyond the home neighborhood, even for low-income blacks. In smaller metropolitan areas, reachable jobs may encompass those located in both the city and the suburbs, resulting in unimportant differences in job accessibility between white and black workers.

Studies Comparing Job Accessibility and Neighborhood Effects

Generally, studies of spatial mismatch have focused exclusively on job accessibility as a determinant of labor market outcomes, whereas studies of neighborhood effects have failed to consider the neighborhood's proximity to available jobs. The failure to consider both job access and neighborhood effects together is problematic, since neighborhoods with negative effects are frequently distant from job opportunities for less educated workers.

Two recent studies have included both neighborhood descriptors and a job accessibility measure as independent variables in youth employment models (Cutler and Glaeser, 1995; O'Regan and Quigley, 1996). These studies find that both neighborhood effects and job access are important and that the strength of the former effects is dominant. This regression evidence contrasts with the qualitative evidence obtained from the housing voucher recipients who participated in Chicago's Gautreaux program.10 As described more fully below, participants who moved to predominately white, middle-income neighborhoods in the suburbs have higher employment rates than those who moved to predominately black, low-income neighborhoods in the central city. When the suburban movers were asked to explain why their suburban location helped them get jobs, both job accessibility and neighborhood influences were emphasized, but the former was ranked consistently above the latter in relative importance.

Evidence on Residential Segregation and Social and Economic Outcomes

Since beliefs are that job access is poorer and neighborhood effects are more negative in segregated neighborhoods, another approach to the question "Does residential location matter?" is simply to relate residential segregation to specific social and economic outcomes. Although this approach is certainly not new (Masters, 1974; Galster, 1987a), the results of recent studies based on the Gautreaux program are of considerable interest, since the use of novel data provides results that are less subject to bias from the endogeneity of residential

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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location. Another reason for the interest in these studies is that, if segregation is not found to matter to black welfare, then there would be support for rejecting both the spatial mismatch and the neighborhood effects hypotheses.

In the minds of many, the Gautreaux program provides the strongest extant support available for the proposition that intrametropolitan residential location matters to social and economic prospects. As a result of a Supreme Court consent decree in 1976, families residing in or on the waiting list for public housing were given Section 8 certificates to rent market rate housing in "revitalized" Chicago-area neighborhoods. The Gautreaux program participants were randomly assigned to move to city or suburban areas, creating a quasi-experimental design. Although some "cream skimming" occurred, selection criteria were not very stringent and eliminated less than one-third of applicants.11

Rosenbaum (1995:235) and his various colleagues compared the fortunes of Gautreaux program participants who moved to predominately black, low-income areas in the city of Chicago with those who moved to predominately white, middle-income neighborhoods in Chicago's suburbs. For the adults, who were mostly single mothers originally on public welfare, the results indicate that employment was higher among suburban than central-city movers, but earnings and hours per week were not different, even after extensive controls (Rosenbaum, 1996). Suburban movers were asked to explain why their suburban location helped them get jobs. All mentioned the greater number of jobs in the suburbs. Improved physical safety and positive role models were ranked second and third in importance, respectively. There is support, therefore, for both the spatial mismatch and the neighborhood effects hypotheses.

Results for the children of Gautreaux participants showed that suburban in comparison to city movers are more likely to graduate from high school, attend college, and attend a four-year college. Among youth who did not go on to college, suburban movers are more likely to receive higher wages and better job-related benefits.

The social and economic differences between city and suburban movers for both adults and children are all large and statistically significant. This is particularly remarkable since the city movers themselves are probably benefiting from a better neighborhood environment than they had in the housing projects. As Rosenbaum (1995) notes, "city movers are a particularly stringent comparison group."

Evidence Linking Intermetropolitan Location and Opportunity

Neoclassical migration theory maintains that labor and capital flows among regions will, in the long run, equalize expected wages for workers with equivalent amounts of human capital. If this is true, then intermetropolitan location could not cause permanent differences in economic opportunity. However, as noted above, there are two new theories that belie this conclusion; namely, the

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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weak form of the spatial mismatch hypothesis as posited by Cutler and Glaeser and hysteresis effects as hypothesized by Bartik.

Cutler and Glaeser (1995) use data from the 1990 Public Use Microdata Sample on youth living in 204 different metropolitan statistical areas to analyze the following outcome variables: high school graduation, college education, idleness (neither working nor in school), earnings, and (for females) unmarried motherhood. These variables are separately regressed on individual and MSA characteristics, the key variable in the latter group is a dissimilarity index used to measure the degree of housing segregation at the neighborhood level. Recall that Cutler and Glaeser hypothesize that all minorities living in an individual metropolitan area are equally harmed by housing segregation whether or not they live in a segregated neighborhood. To handle the endogeneity of residential location, they measure housing segregation using the following variables: the number of municipalities in the MSA, the share of local government revenue in the state that comes from intergovernmental sources, and the number of rivers. Although anyone's choice of instruments can always be questioned, the results are robust with respect to alternative instruments and show that all of the outcome variables (except college degree) are strongly influenced by housing segregation in a manner that is detrimental to blacks. Moreover, since their results are unchanged when they control for whether the individual resides in the central city or the suburbs, it appears that housing segregation hurts all blacks regardless of where they reside in the metropolitan area. There is, therefore, support for the weak form of the spatial mismatch hypothesis.

Bartik's (1991) book contains extensive empirical research on the various impacts of employment growth in urban areas during the period 1979-1986. He finds considerable evidence of hysteresis effects in local markets. MSA employment growth increases the real earnings of both black and white residents, but the effect is greater for blacks. Stronger effects are also registered for less educated in comparison to more educated workers and younger in comparison to older workers. Increases in local labor demand therefore tend to decrease income and racial inequality in metropolitan areas.12

Conclusion

My reading of the studies cited above leads me to the following conclusions:

  • Residential location both in and between metropolitan areas affects the individual's social and economic prospects.
  • The prospects of minorities and the poor are worse than those of whites and the nonpoor because of racial and income segregation in housing markets.
Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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  • Neighborhood effects, job accessibility, and school resources all play some role in the influence of residential locations on opportunities.
  • The mechanisms perpetuating spatial mismatch include transportation, information, and discrimination-related factors.
  • Black opportunities are richer relative to those of whites in urban areas that are less racially segregated and more rapidly growing in employment.

Policy Alternatives

There are many approaches to the categorization of alternative policies that attempt to improve the "geography of opportunity" for disadvantaged groups living in urban areas. The most popular categorization is to lump specific strategies into three types: place-based initiatives, personal mobility programs, and residential mobility strategies. Place-based initiatives attempt to bring new resources and opportunities to distressed central-city areas. Personal mobility programs seek to link central-city workers with suburban jobs without changing either job or residential locations. Residential mobility strategies open up housing opportunities in those areas where conditions and opportunities are presumably better.13

Numerous assessments of the above types of policies can be found in the literature (see, for example, Ihlanfeldt, 1992; Hughes, 1987).14 The focus here is to update these assessments by drawing on a substantial amount of new evidence and analyses that have become available, mostly in the last five years.

Another noteworthy development in recent years is that more scholars and policy makers have come to view the above policies as complementing rather than contradicting one another (Yinger, 1995; Downs, 1994; Hughes, 1994; Wilson, 1996). Indeed, as Yinger (1995) notes, former HUD Secretary of the U.S. Department of Housing and Urban Development, Henry Cisneros also holds this position. Clearly, there is little disagreement that minorities should have the opportunity to work and live anywhere in the metropolitan area. But a strong case in favor of inner-city redevelopment can also be made. Minority communities make unique political, economic, and cultural contributions that are worth preserving.

Place-Based Initiatives

A number of strategies fall into the category of place-based initiatives, but the one that has received the most attention and arguably the most use has been the urban enterprise zone. As originally conceived, the zone would encompass an economically distressed area in the central city in which taxes and government regulations would be reduced or eliminated in order to stimulate the origination of small, new enterprises. In practice, the urban enterprise zones established by

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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state governments have offered businesses tax and other financial incentives along with technical assistance.

There is wide disagreement among scholars and policy makers regarding the desirability of urban enterprise zone s as a policy instrument. The critics of UEZs have made three arguments:

  • The benefits accruing to individual firms from locating in an urban enterprise zone are insufficient to overcome the many other obstacles associated with a central-city location, namely, crime, inadequate space, and higher wages for skilled employees.
  • Growth in jobs may occur as the results of zone inducements, but it will not result from the origination of new firms. Instead, growth will occur if existing firms or new rums that would have started up even without the zone choose to locate in the enterprise area. Hence the zone's employment gain is offset by a loss of jobs elsewhere.
  • Regardless of the source of the job growth that occurs in enterprise zones, the expansion in jobs will not help indigent residents, because they do not possess the skills necessary for employers to hire them.

Evidence relevant to the first criticism has been highly mixed. However, the lion's share of this evidence should be disregarded, since it has been compiled using impressionistic or descriptive rather than analytic methods. Deficiencies in the analyses of urban enterprise zones that have focused on employment impacts have been ably inventoried by Vidal (1995:181): ''At the most basic level, impact evaluation shortcomings include reporting jobs gained (or 'retained') without netting out job losses, or reporting net job change without establishing a link between employment changes and zone program elements. More thorough analyses that attempt to assess whether observed outcomes are attributable to the program have relied primarily on seriously flawed methods (e.g., before and after studies, employer surveys).''

There are, however, two recent econometric studies that do provide some reliable evidence on whether urban enterprise zones improve conditions in and around their boundaries (Papke, 1994; Boarnet and Bogart, 1996). These studies are unique in that they estimate "fixed effects" models using panel data, which have the important advantage of controlling for permanent differences across areas that are likely to influence zone designation. On the one hand, Papke finds evidence that the program in Indiana increased business investment and reduced employment claims. Boarnet and Bogart, on the other hand, find that the program in New Jersey had no impact on total municipal employment, on employment in various sectors, or on municipal property values. As a possible explanation for the difference in their and Papke's results, Boarnet and Bogart suggest that the specific programs and sites in Indiana were more attractive to firms than those in New Jersey. The possibility that the success or failure of a specific

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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program hinges on an area's inherent potential for growth is frequently emphasized (Levitan and Miller, 1992; Erickson and Friedman, 1991). Apparently, the question of whether an urban enterprise zone improves economic conditions in targeted areas cannot be given a simple yes or no, but rather the qualified answer that some do and some do not, depending on the circumstances. Unfortunately, we do not know which circumstances are most conducive to success. Levitan and Miller argue that the "other ingredients" required for success include the physical appearance, service, and infrastructure of the area, and Erickson and Friedman emphasize an adequate labor pool with good basic skills. But neither of these positions is based on persuasive evidence.

The evidence on the second criticism of urban enterprise zones, which comes from both British and state experiences, indeed suggests that the incentives offered do not create jobs but instead cause a diversion of activity that would otherwise have occurred elsewhere (Ladd, 1994). Urban enterprise zones are therefore "locational" rather than "generative" (Lehman, 1994). This, however, is not altogether bad. As noted above, the evidence suggests that minorities and whites do not enjoy equal access to jobs. Reshuffling jobs from suburban to central-city areas may be justified on a fairness criterion. In addition, the effects of the job loss experienced outside the enterprise area must be measured against the decline in crime and other antisocial behaviors committed by zone residents as the result of their improved employment opportunities. Finally, as Bartik (1991) has pointed out, individuals living in high-unemployment areas probably place a higher value on getting a job than individuals in low-unemployment areas. Thus the relocation of jobs in favor of zones may enhance net social welfare. At least one state has recognized the validity of one or more of these arguments: the Illinois' program explicitly states as one of its goals moving investment to the urban enterprise zones from elsewhere in the state (McDonald, 1997).

The evidence on the third criticism—that new jobs do not go to residents of the zone—is considerably thinner than that for the first two criticisms. The two studies that do exist are contradictory. A survey of the urban enterprise zones in 17 states conducted by the U.S. Department of Housing and Urban Development indicates that 61 percent of new jobs went to zone residents (Vidal, 1995). However, various analyses of Indiana's program conclude that less than one-third of total new zone jobs went to zone residents (James, 1991; Papke, 1988; Indiana Department of Commence, 1992). This is particularly noteworthy since Indiana's program, unlike those of most states, includes a tax credit for hiring zone residents. This does not augur well for the recently designated urban "empowerment zones," which also include tax credits for hiring zone residents.15

In addition to urban enterprise zones, there are other place-based initiatives that have received far less attention, but recent evidence suggests they have generally succeeded in improving opportunities in poor inner-city neighborhoods. These include community development financial institutions and community development corporations.16 Vidal (1995) has recently evaluated both, and Harrison

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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et al. (1994) and Stoecker (1997) have evaluated community development corporations. Vidal focuses on five types of community development financial institutions: community development banks, bank-owned community development corporations, community development credit unions, community development loan funds, and microenterprise loan funds. She argues that there is a legitimate need for community development financial institutions since there is overwhelming evidence that conventional financial institutions underserve both households and businesses located in depressed inner-city areas. Performance evaluations of community development financial institutions are sparse, but the information that is available led Vidal to reach the following conclusions:

  • Community development financial institutions effectively target their services to people and places with restricted access to capital and services.
  • Their operations are too limited to make up for the credit gaps left by mainstream financial institutions in poor inner-city communities.
  • Some community development financial institutions are playing a useful role by demonstrating to conventional lenders how to profitably do business in low-income and minority neighborhoods.
  • Although community development financial institutions fulfill the needs of an important market niche, the solution to unequal credit and other financial services in poor inner-city communities must come from conventional financial institutions, through stricter community regulations and enforcement.

The three evaluations of community development corporations all have different foci. Vidal (1995) takes a comprehensive look at strategies and records in all three of the areas that community development corporations have traditionally addressed: affordable housing, neighborhood commercial services, and social networks and services. Harrison et al. limit their analyses to the involvement of community development corporations in the employment and training business. Both evaluations are based on findings reported in the literature as well as their own national surveys. Stoecker questions the viability of an urban redevelopment model that relies on community development corporations and proposes an alternative.

Vidal gives community development corporations high marks in each of their three program areas. She cites considerable evidence that they have succeeded as "gap fillers" in the sense that they respond to important community needs that are unmet by other institutions. In her estimation (Vidal, 1995:222): "Resources permitting, community development corporations pursue a diversified agenda aimed at making their communities better places to live and improve the opportunities available to local residents. Available evidence indicates that they have a strong track record in targeting the benefits of their work to needy people and places." Vidal recommends that the capitalization of community

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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development corporations be deepened and that their effective scope be expanded. She sees them as more promising than community development financial institutions or urban enterprise zones as place-based initiatives for improving access to opportunities for residents of poor communities.

Harrison et al.'s review (1994) is also favorable to community development corporations. In their study of the community development corporations located in 10 urban areas around the country, they found many were successfully involved in some manner of job training, placement, and counseling activities. However, the greatest successes were found in activities that connected neighborhood residents with mainstream institutions. Instead of increasing their employment training capacity, the authors recommend that community development corporations network even more extensively with specialized agencies, community colleges, and employers who can train and place their constituents.

In contrast to the evaluations of Vidal and Harrison, Stoecker (1997) is highly critical of community development corporations. He argues that they are too small to have much of an impact on neighborhood revitalization and that they lack community participation. According to Stoecker, the latter reflects the control that is exerted by funders from outside the community. He recommends that community development corporations become high-capacity and multilocal in character and be held accountable through a strong community organizing process.

It is important to note that the evidence reviewed and provided by Vidal and Harrison and his colleagues is entirely anecdotal. In particular, there is no statistical evidence on the effectiveness of community development corporations as job generators. It is therefore unknown whether they are more effective than urban enterprise zones in reducing joblessness in distressed central-city neighborhoods. One approach that future research might take to answer this question is to estimate the same type of fixed effects models that have been used to evaluate urban enterprise zones but allowing for employment shocks from both community development corporations and urban enterprise zones.17

A final set of place-based initiatives defines "place" more broadly to include the entire metropolitan area. As discussed above, Bartik's research suggests that economic development policies that increase metropolitan growth can provide significant labor market opportunities for blacks and the poor. There are a plethora of policies currently in use: tax abatements, technology development programs, general tax cuts, improvements in local education, assistance to manufacturers for modernization and exporting, business incubators, and entrepreneurial training programs (Bartik, 1993). Whether and to what extent each of these polices stimulates metropolitan employment growth is not known with any reasonable degree of confidence. However, both theory and extant evidence can be drawn on to develop general principles that economic development programs should seek to satisfy to maximize their cost-effectiveness. A list of 10 such principles appears in Ihlanfeldt (1995).

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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Personal Mobility Programs

The objective of these programs is to open up more suburban job opportunities to poor central-city residents. As mentioned above, there are three possible barriers that may prevent the central-city poor from obtaining suburban jobs. Although the relative importance of transportation, information, and discrimination-related factors in denying city residents suburban jobs has not been clearly established, the magnitudes of the estimates reported in recent studies suggest that the elimination of any one of these barriers would have nontrivial effects on opening up more suburban jobs opportunities to central-city residents.

Numerous reverse-commuting programs have been implemented nationwide, with almost every large metropolitan area having tried at least some type of service. There are a number of inventories of these programs (American Public Transit Association, 1993; Drachman Institute, 1992; Hughes, 1989; Hughes and Sternberg, 1993), but little evaluation has been done of their effectiveness.18 Recently, Public/Private Ventures, a research organization located in Philadelphia, was awarded funding from various philanthropic foundations and the federal government to conduct a four-year demonstration. The project, which is entitled, "Bridges to Work," will provide reverse-commuting services to the central-city poor located in five large cities from spring 1997 to December 2000. An important feature of the research is that both treatment and control samples will be drawn. The latter will consist of poor central-city residents who receive their communities' usual employment-related services. This research promises to provide the first reliable evidence on the effectiveness of transportation programs as an antipoverty strategy.

Another demonstration that merits consideration is one in which local transit authorities would give up their current status as monopoly suppliers of services. In recent years, this idea has been promoted as a solution to the chronic deficits experienced by mass transit authorities and as an approach to decreasing the reliance on the private car for the journey to work (Lave, 1985). In addition, in a deregulated environment, creative entrepreneurships providing reverse-commuting services would have an opportunity to develop. Although their completely free entry onto the transportation scene may not be in the offing, reverse-com-muting services that would complement rather than compete against existing public transit are a real possibility. For example, an attractive option for getting inner-city workers to suburban jobs would be jitneys that would pick them up at transit stops along major cross-suburban routes and drop them off near their places of employment.19

There is other evidence, some optimistic and some pessimistic, regarding the likely success of reverse-commuting programs. One criticism of these programs is that central-city residents would be unwilling to make the lengthy commutes required to get to available suburban jobs. However, Harrell and Peterson (1992) cite evidence by Kasarda (1992) showing that journey-to-work times are only

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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marginally higher for city-to-suburb commuters in comparison to within-city commuters. Black workers who reverse-commuted spent only 2 to 6 minutes more per trip than black workers who lived and worked in the central city. These results are consistent with those of Ihlanfeldt (1992), who found that job accessibility for less educated workers is at its maximum in the inner rather than the outer suburbs. In all but the very largest metropolitan areas, a van traveling from the ghetto against traffic can probably reach jobs located in the inner suburban ring in less than half an hour.

Some pessimistic evidence is reviewed by Rosenbaum (1996) showing that employers consider a housing project address, a central-city address, or attendance at a city public school as signals of poor workers. He is skeptical of transportation programs because they will not fix these residential barriers. Wilson (1996:22) recommends that this problem be addressed by having not-for-profit job information and placement centers certify inner-city workers: "These centers would recruit or accept inner-city workers and try to place them in jobs. One of their main purposes would be to make persons who have been persistently unemployed or out of the labor force "job-ready" so that a prospective employer would be assured that a worker understands and appreciates employer expectations such as showing up for work on time and on a regular basis, accepting the orders of supervisors, and so on. When an information and placement center is satisfied that a worker is job-ready, then and only then would the worker be referred to an employer who has a job vacancy."

Wilson (1996), Kasarda (1988), and Jargowsky (1997) have all advocated the use of a computerized job opportunity network providing up-to-date information on available jobs throughout the metropolitan area. However, programs that are specifically designed to provide information on suburban jobs to central-city workers are rare, and little is known regarding their effectiveness. Once again, a demonstration project can be recommended. Since it is relatively inexpensive to disseminate information, the cost of conducting such a demonstration would be minuscule compared with conducting transportation experiments.

Residential Mobility Strategies

The purpose of residential mobility strategies is to mitigate constraints on residential choice that fall disproportionately on the poor and minorities. The greatest concern is over the inability of the latter two groups to settle in middle-income suburbs, especially those where jobs are available, because of regulatory barriers that artificially inflate the cost of housing and racial discrimination in housing and mortgage markets.

A growing number of social scientists have argued that the use of exclusionary zoning by suburban governments can be curbed only by having state governments pressure local governments to change their behavior (see, for example, Downs, 1993; Salins, 1993). This approach is seen as more politically acceptable

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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than trying to make local governments accept some "quotient" of affordable housing. However, the reality is that states have little incentive to adopt policies that would compel local communities to open up their borders to low-income households. One way to create the necessary incentive is to have the federal government intervene by making housing or other federal assistance conditional on states' adoption of antiexclusionary policies. However, with the movement toward hands-off federalism (Nathan, 1992), this intervention is unlikely to occur any time soon. Moreover, even if the federal government was inclined to become involved, there is concern that the amount of federal assistance required to change states' behavior would be prohibitive in light of current budget realities (Schill, 1992).

Nevertheless, there still may be hope for changes in states' behavior. There is much uncertainty surrounding possible state responses to the recent devolution of welfare responsibilities from the federal government to the states. As welfare recipients are forced off the dole and into the labor market, the resulting increase in labor supply in central cities may exacerbate spatial mismatch to such an extent that central cities become overwhelmed with unemployed and homeless people (Wilson, 1996). States may be forced to step in to alleviate the mismatch. The least costly strategy from the states' perspective would be to pressure suburban governments to allow higher-density housing development in their borders.

There is overwhelming evidence that blacks and Hispanics continue to suffer from housing and mortgage market discrimination (Yinger, 1995). As the result of this discrimination, housing segregation is largely involuntary. Clearly, stronger enforcement of fair housing legislation is necessary to improve the housing and labor market opportunities of minorities. Although there exist differences of opinion on how to best accomplish this, both Downs (1992) and Yinger (1995) provide comprehensive antidiscrimination programs that promise to be cost-effective and politically feasible. An important common element of both programs is random audit-based testing in every metropolitan area at regular intervals.

Successful residential mobility policies would open up suburban neighborhoods to the poor and minorities. If the incumbent households remain in these neighborhoods as previously excluded households move in, greater racial and economic integration will result, which will mitigate both spatial mismatch in the labor market and negative neighborhood effects. Realistically, however, white flight of some magnitude will occur, which may limit any integration that may result.20

Little research has been done on policies that may stem white flight from suburban neighborhoods. Policies that merit consideration include urban growth boundaries, government-guaranteed price floors, and scattering housing voucher recipients to keep neighborhoods below the "tipping" point. Urban growth boundaries have been proposed as a solution to urban sprawl and are currently used in a growing number of states for this purpose. But by confining all or most growth

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

to within the established boundary, they may also contribute to integrated neighborhoods by constraining the further decentralization of affluent whites in response to neighborhood infiltration of minorities or low-income households. The efficacy of price floors as a neighborhood integration strategy depends on the extent to which white flight is a panic response to concerns over expected declines in house values (Leven et al., 1976). The scattering strategy has been emphasized as an important reason for the success of the Gautreaux program reviewed above (Rosenbaum, 1995).

The most controversial issue regarding the attainment of stable integrated neighborhoods is whether integration should be achieved by "managing" the entry of blacks into white neighborhoods to keep these neighborhoods below they tipping points. Many authors have expressed opinions on this issue, and the positions of Yinger (1995) and Downs (1992) are representative of those on both sides of the debate. Yinger's objections to quotas are that they are contradictory to free choice and that they are unnecessary, since there are alternative policies that are consistent with both the elimination of discrimination and the promotion of integration. The centerpiece of his stable neighborhood initiatives program (snip) are grants to changing neighborhoods to improve they quality, for example, by boosting public services or increasing housing maintenance.21

Downs (1992) believes that controls on black entry into white neighborhoods represent justifiable discrimination, since such controls do result in a socially desirable outcome: stable integrated neighborhoods. Moreover, he argues along with Galster (1987b) that, although controls limit freedom of choice, the absence of integrated living opportunities would also limit people's freedom of choice.

At the center of the disagreement between Yinger and Downs is whether there are indeed policies other than controls that can achieve racially stable neighborhoods. Downs is doubtful, whereas Yinger believes in SNIP. However, as is true for growth boundaries and guaranteed price floors, there is little evidence, either pro or con, that can be drawn on to assess the probable success of SNIP. Research on these alternatives is needed. In addition, much could be learned from conducting comparative analyses of neighborhoods in and across metropolitan areas that have succeeded and failed to achieve lasting integration.

An important first step of comparative analysis has been taken by Ellen (1996). She compared census tracts that remained racially mixed and those that underwent racial succession between the two decennial periods 1970-1980 and 1980-1990. She found that among the tracts that underwent racial transition, racial differences in entry in comparison to exit were more important in explaining the change from white to black residency. This suggests that achieving stable neighborhoods require not only stemming white flight but also encouraging whites to choose mixed neighborhoods. Ellen also found that the tendency of whites to leave racially changing neighborhoods and they reluctance to select mixed neighborhoods appear to be based not on pure prejudice but rather they belief that the

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

entry of blacks will result in the neighborhood's structural decline, which would include such changes as declines in property values and lower school quality.22 Ellen bases this conclusion largely on results obtained from estimating residential mobility models for white owners and renters. These results show that increases in the percentage of the neighborhood's residents who are black have a stronger influence on the moving probabilities of owners in comparison to renters, owners with children in comparison to childless owners, and owners with children in public school in comparison to those with children attending private school. These results lend support to the use of guaranteed price floors and greater spending for public schools in changing neighborhoods, as recommended by Yinger's SNIP.23

Social and Economic Opportunities and the System of Local Government

The structure of local government may affect the linkages between residential location and opportunity outlined in the earlier discussion as well as the effectiveness and feasibility of the policies discussed above. Unfortunately, theoretical development and empirical evidence having a bearing on these possible effects are extremely thin. In this section I review what little research exists and identify in what ways metropolitan governance may matter.

The Residential Location/Opportunity Nexus and Political Fragmentation

Most of the research that relates the structure of local government to opportunity focuses on the Tiebout (1956) sorting process and its effects on educational opportunities. Under the Tiebout "feet-voting" mechanism for the articulation of preferences for local public goods, higher income households have incentives to sort themselves into school districts that exclude households poorer than themselves. These incentives include the desire to maximize both the fiscal residuum (i.e., benefits received minus taxes paid) received from local government, which requires the exclusion of free riders, and the quality of the student peer group, which is positively related to household incomes. Tiebout sorting by income level therefore results in inequalities in educational opportunity across school districts. Higher-income districts spend more money on schools, since education is a normal good, and provide more favorable peer environments.

Political fragmentation may also exacerbate spatial mismatch and neighborhood effects, although in contrast to the Tiebout literature there are no theoretical models elucidating possible relationships and little relevant empirical evidence. In fact, the only book that explores these relationships—Cities Without Suburbs by David Rusk (1995)—was written primarily for a nonacademic audience and contains only tabular evidence. Nevertheless, Rusk's book is of considerable interest for reasons outlined below.

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

Rusk argues that metropolitan areas with more "elastic" central cities have less racial segregation. Elastic cities are defined by Rusk as those that have developable vacant land in their boundaries and have demonstrated the ability to expand their boundaries outward over time. Operationally, his measure of elasticity places three times as much weight on the latter factor in comparison to the former factor. He divides metropolitan areas into five categories based on the elasticity of their central cities and computes a series of descriptive statistics for each category. His tables indicate that metropolitan areas with more elastic central cities generally have the following features relative to those with less elastic central cities:

  • a higher percentage of the area's population is governed by the central city,
  • there are fewer suburban governments,
  • a smaller percentage of the area's blacks and Hispanics live in the central city,
  • both black and Hispanic dissimilarity indexes are lower, indicating less racial segregation at the neighborhood level, and
  • schools are less segregated for both blacks and Hispanics.

Rusk provides the following explanation for the tendency for metropolitan areas with more elastic central cities to be less racially segregated (1995): "Does greater socioeconomic integration automatically flow from greater government unity? Probably not. What is clear is that, absent federal or state mandates, a metropolitan area in which local government is highly fragmented is usually incapable of adopting broad integrating strategies. Conversely, a metropolitan area in which key planning and zoning powers are concentrated under a dominant local government has the potential to implement policies to promote greater racial and economic integration if that government has the courage and vision to do so."

Another explanation for why elastic cities are less segregated revolves around the incentives for white flight from the central city and the exclusion of minorities from white neighborhoods. In addition to containing a larger percentage of the region's population, elastic cities encompass a greater share of the region's land area. Hence, moving to the suburbs would entail a longer journey to work for central-city workers. This disadvantage would work against the benefits to whites from living in a segregated suburban community. In addition, central-city whites may expect that the fiscal benefits from moving to the suburbs may be short-lived, since by definition elastic cities have the capacity to capture suburban growth by extending their boundaries outward via annexation or consolidation. Integration may also be greater in metropolitan areas with more elastic central cities because the housing choices of minority households are less constrained by exclusionary zoning.24

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

Obviously, the findings of Rusk require confirmation from estimated models that include a full set of appropriate controls. If it is verified that a nontrivial relationship exists between housing segregation and metropolitan governance, this would be an important result. As noted above, the evidence provided by both Rosenbaum and Cutler and Glaeser, without implicating either neighborhood effects or spatial mismatch, strongly suggests that housing segregation reduces the social and economic opportunities of blacks. In addition, Jargowsky's (1997) results suggest that blacks experience worse neighborhood effects in metropolitan areas where housing segregation, once again measured by a dissimilarity index, is higher.25

The Impact of Fragmentation on Policy

All three categories of policies outlined earlier for dealing with spatial variation in economic and social opportunities are affected by local government fragmentation. Residential mobility policies are affected because, as emphasized above, fragmentation results in exclusionary zoning, which frustrates efforts to open up suburban neighborhoods to poor central-city residents. Personal mobility strategies are affected because coordination among a multiplicity of different municipal agencies creates organizational barriers to implementing successful reverse-commuting and job information programs. Since fragmentation complicates effective planning on an area-wide scale, metropolitan area-wide economic development programs are also difficult to initiate. As Rusk (1995:70) has duly noted: ''Who speaks and acts for greater Detroit or greater Cleveland, suffering from high political fragmentation, strong racial divisions, sharp income differentials, interjurisdictional competition—in short, from the loss of a shared sense of community and common destiny nationwide?'' Place-based policies that focus on central-city economic development are probably least affected by political fragmentation. Yet, even here, fragmentation can have ill effects, since interjurisdictional competition may necessitate that central cities offer greater tax and other incentives than they really can afford.

Directions for Future Research

Gaps in our knowledge of the geography of economic and social opportunity in metropolitan areas have been identified throughout this paper. However, thus far suggestions for future research have not been prioritized. In this section I identify the research question from each of the previous three sections that I believe is most important among those that can feasibly be addressed with existing data. Although I recognize that demonstrations can be more informative than econometric models, the former are not very practical in today's fiscal environment. Besides, the questions I identify are so basic to the topic of this paper that

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

they should probably be answered before proceeding with any new costly social experiments.

Research on Linkages

The policy prescriptions for arresting negative neighborhood effects and spatial mismatch in the labor market overlap but do not coincide. It is therefore important to sort out the relative importance of these alternative linkages between residential location and opportunities. Moreover, as noted above, few studies have modeled neighborhood effects and job accessibility together, which suggests that a large portion of the results reported in the literature may be biased by omitted variables. Now that individual-level data are becoming available that identify the person's neighborhood location, much can be learned by estimating fully specified models of social and economic outcomes.26

Research on Policies

There has been great interest, even excitement, among both scholars and policy makers in the success of the Gautreaux program.27 However, the effectiveness of all residential mobility programs—Gautreaux-type, antidiscrimination, and antiexclusionary—is jeopardized by the possible flight of incumbent suburban residents as their neighborhoods are infiltrated by the poor or minorities. Opening up the suburbs to central-city residents will have little long-run effect on their opportunities if stable, integrated neighborhoods cannot be achieved.28

The causal factors that underlie the white flight response (as well as the unwillingness of whites to move into changing neighborhoods) have not been clearly identified. Racial and income prejudice, concerns over property values and student peer group effects, as well as other factors may all play a role and need to be studied. More work, along the lines begun by Ellen (1996) comparing the traits of racially stable and unstable neighborhoods, can be recommended, since such research may point toward policy solutions.

Research on the System of Local Government

Income and racial segregation at the neighborhood level are strong forces limiting the social and economic opportunities of the poor and minorities. The reasons outlined and evidence reviewed above suggest that there may be important relationships between the system of local government and neighborhood segregation. Research is needed that focuses on explaining the substantial differences that exist in the degree of housing segregation across metropolitan areas.29 Farley and Frey (1994) addressed this issue by regressing the metropolitan area's black-white dissimilarity index for 1990 on the region, the functional specialization of the area, the age of the area, the pace of new construction, and a set of

Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
×

demographic characteristics. Descriptors of the system of local government in the metropolitan area were not included. However, they suggest that their regional results, which indicate that metropolitan areas in the West and the South are far less segregated than those in the Midwest and Northeast, largely reflect the types of local government systems that characterize each region. They point to two differences that may be important. First, zoning and policing decisions tend to be made at the county level in the South but at the municipality level in the Northeast and Midwest. County-level governance may open up more suburban housing opportunities for the poor and minorities. Second, metropolitan areas in the South and the West have more permissive annexation laws than areas located in the Northeast and the Midwest. Annexation by central cities limits the amount of land in metropolitan areas that is governed by suburban governments practicing exclusionary zoning. Moreover, as noted earlier, annexation permissiveness may alter the incentives that higher-income households have to move from central cities to suburban areas.

These hypotheses and possibly others should be honed theoretically and examined empirically by estimating models that include variables fully describing the system of local government in metropolitan areas.

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Notes

    1  

    Evidence on segregation in metropolitan housing markets, on one hand, indicates that racial segregation has declined over time but remains at a high level (Farley and Frey, 1994). Evidence on income segregation indicates that it has been increasing but is not nearly as high as racial segregation (Abramson et al., 1995; Massey and Eggers, 1993; Jargowsky, 1996). The increase in income segregation has occurred in the white, black, and Hispanic groups, but the largest increases were for minorities during the 1980s (Jargowsky, 1996).

    2  

    Wilson (1987:8) defines the underclass as the heterogenous grouping of families and individuals who lack training and skills and either experience long-term unemployment or are not part of the labor force, individuals who engage in street criminal activity and other aberrant behavior, and families who experience long-term spells of poverty and/or welfare dependency.

    3  

    In fact, if low-skilled whites can easily shift their labor supply to the suburbs in response to job decentralization, then spatial mismatch is unlikely to be much of a problem, since this may represent enough supply adjustment to eliminate the disequilibrium.

    4  

    The dependence of long-run effects on short-run events has been labeled "hysteresis," a term

    Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
    ×

         

      taken from physics that refers to the time lag exhibited by a body in reacting to changes in the forces affecting it.

      5  

      This fact is explained by the standard urban model if the income elasticity of housing demand exceeds the income elasticity of commuting cost. Alternatively stated, higher-income people may have longer commutes because they wish to consume more units of housing at a lower price. This explanation assumes that housing prices on average decline as distances to employment centers increase, which considerable empirical evidence suggests is the case (see, for example, Jackson, 1979). Other models suggest that higher-income workers travel farther to get to work because they are willing to trade commuting costs for either environmental amenities or better government services.

      6  

      Kasarda and Ting find that their measure of job access—commute time of city residents for each racial group—has no effect on their outcome variables for black males, which unlike the rest of their results is inconsistent with the spatial mismatch hypothesis. However, all of their results may be underestimates of true effects, due to the crudeness of their access measure (which they acknowledge) and their failure to address the simultaneity between their endogenous variables and residential location.

      Thompson recognizes that simultaneity between labor force participation and job access may affect his results, but be believes the bias will be small, since the women in his sample have uniformly low earnings and household incomes, making it difficult for them to trade higher commuting costs for a more spacious home.

      7  

      To quote Ellwood's often repeated aphorism, "The problem isn't space. It's race."

      8  

      In comparison to adults, youth are less likely to have access to an automobile for commuting to work, they may place a higher value on their commuting time due to their school responsibilities, and have less information on distant jobs because of a greater reliance on informal sources of job information.

      9  

      The results of Holzer et al. (1994) are also suggestive of information limitations. They find that black and white central-city youth do not offset greater job decentralization with greater distances traveled, for either search or work.

      10  

      It should be noted that both of the regression studies use questionable measures of job accessibility. Both use variants of neighborhood mean commute times based on the reasonable assumption that a youth has better job access if he or she lives in a neighborhood where residents have to make only a short commute to get to work. However, neither study standardizes travel times for transportation mode and both use travel times to all jobs in computing means. Since there is considerable variation in travel times between public and private carriers and the spatial distribution of youth jobs differs from that of all jobs, the findings of Cutler and Glaeser and O'Regan and Quigley may understate the true effects of job access by a considerable amount.

      11  

      The Gautreaux program does not admit families with more than four children, large debts, or unacceptable housekeeping.

      12  

      More recent research by Bartik (1994) provides further support for this conclusion. He finds that metropolitan-area employment growth increases the income of households in the poorest income quintile by five times as much as the increase experienced by households in the richest quintile.

      13  

      A fourth category of policies includes educational reforms, such as site-based management, charter schools, vouchers, and school choice. These reforms are not discussed here, since adequately covering them would extend this paper to unmanageable length. For a recent review of current issues in public urban education, see Picus, Lawrence O. 1996. Current Issues in Public Urban Education. Housing Policy Debate 7(4):715-730.

      14  

      In fact, the dispersal (category three) versus development (category one) debate has been simmering and at times raging for over 25 years. Early participants in this debate include Kain and Persky (1969), Downs (1968), Edel (1972), and Harrison (1974).

      15  

      Apparently, the problem with tax credits for targeted jobs is that they have a stigmatizing effect on members of the targeted group in the eyes of employers (Burtless, 1985; Bishop and Kang, 1991).

      Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
      ×

        16  

        Other place-based initiatives that could be listed are business retention and expansion programs focused on areas in central cities where jobs are most needed. Although a number of cities have such programs, no evidence could be located on their effectiveness. Nevertheless, their low cost in comparison to tax incentives and other types of programs designed to attract new firms makes these programs an attractive option. Downs (1994) recommends that city governments survey employers to see what problems they have and what can be done to solve them.

        17  

        This approach is complicated by the heterogeneity of community development corporation employment programs. They may fare more or less well relative to urban enterprise zones depending on the specifics of their programs.

        18  

        There was a series of reverse-commuting demonstration projects funded by the federal government in the 1960s. These projects produced at best only meager benefits. But these results may not be applicable today, since there have been major changes in the spatial distributions of jobs and people in metropolitan areas over the past 30 years.

        19  

        Between 1915 and 1920 jitneys, which were private vehicles (mostly Ford Model Ts), profitably operated in many metropolitan areas throughout the United States (Eckert and Hilton, 1972). They had flexible destinations and carried multiple passengers, generally going to different but nearby locations. Their life in America was cut short by regulations passed by municipalities that made their costs of doing business prohibitive. Jitneys were put down in order to preserve streetcars, which were favored because, unlike jitneys, they were an important source of tax revenue for local governments. It was also believed that competition between streetcars and jitneys would make it impossible for streetcars to subsidize their longer routes from revenues generated by their shorter routes, which were rapidly losing patronage in favor of the faster, more convenient service provided by the jitneys.

        20  

        Even with white flight, residential mobility policies will improve the job accessibility of minorities. Although retailing and personal services will follow whites to more distant suburbs, the immobility of capital will keep manufacturing jobs in those areas that undergo racial transition.

        21  

        Other provisions include race-conscious counseling; housing centers that disseminate information on neighborhood change, provide counseling, and prevent the spread of rumors; and bonuses for metro-based organizations that work with several integrated communities.

        22  

        Some additional evidence that whites' aversion to black neighbors in not based on pure racial prejudice is provided by Harris (1997). He estimates hedonic housing price equations and finds that the racial composition of the neighborhood is not a statistical significant explanatory variable, after controlling for nonracial characteristics of the neighborhood (e.g., percentage poor and percent affluent).

        23  

        There is the possibility that Ellen's results reflect, at least in part, differences in prejudice between owners and renters and families with and without children. To the extent that this is true, policies to arrest structural decline will be less effective in achieving racially stable neighborhoods.

        24  

        Cutler and Glaeser (1995) have also suggested that political fragmentation may impose an added cost on blacks trying to change neighborhoods because a different neighborhood may have different public goods and perhaps even public goods designed to discourage racial integration. Their examples of the latter are racist police officers and schooling designed particularly for white suburban residents.

        25  

        Jargowsky studies the factors that determine what percentage of a metropolitan area's blacks will live in high-poverty census tracts. The latter are defined as tracts that have a poverty rate of 40 percent or higher and are commonly believed to contain the worst neighborhood effects. His regression model includes metropolitan-area mean household income, mean black income relative to overall mean income, measures of income inequality, and dissimilarity indexes to measure economic and racial segregation. The latter variable is found to have a strong and highly statistically significant effect on the percentage of blacks living in concentrated poverty.

        26  

        For example, the Multi-City Study of Urban Inequality data identify respondents' home census tracts. Under special arrangements, tract identifiers can also be appended to the individual

        Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
        ×

             

          records of the Panel Study of Income Dynamics, the Public Use Microdata Samples, and the American Housing Survey.<End Popup Text>

          27  

          The success of this program caused Congress in 1992 to fund a Gautreaux-type program, called Moving to Opportunity, which was initiated in five cities in 1994. The program encountered severe opposition in the suburbs of Baltimore, one of the five cities selected. This was all the fodder needed by opponents in Congress to kill the program after its first year.

          28  

          Evidence suggests that white flight from inner to outer suburban areas during the 1980s was as virulent as the white flight from central cities to inner suburban areas during the 1960s and 1970s (Ihlanfeldt, 1994).

          29  

          See Farley and Frey (1992), who report the 1980 and 1990 index of dissimilarity for each of 318 U.S. metropolitan areas.

          Suggested Citation:"The Geography of Economic and Social Opportunity in Metropolitan Areas." National Research Council. 1999. Governance and Opportunity in Metropolitan America. Washington, DC: The National Academies Press. doi: 10.17226/6038.
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          America's cities have symbolized the nation's prosperity, dynamism, and innovation. Even with the trend toward suburbanization, many central cities attract substantial new investment and employment. Within this profile of health, however, many urban areas are beset by problems of economic disparity, physical deterioration, and social distress.

          This volume addresses the condition of the city from the perspective of the larger metropolitan region. It offers important, thought-provoking perspectives on the structure of metropolitan-level decisionmaking, the disadvantages faced by cities and city residents, and expanding economic opportunity to all residents in a metropolitan area. The book provides data, real-world examples, and analyses in key areas:

          • Distribution of metropolitan populations and what this means for city dwellers, suburbanites, whites, and minorities.
          • How quality of life depends on the spatial structure of a community and how problems are based on inequalities in spatial

            opportunity--with a focus on the relationship between taxes and services.

          • The role of the central city today, the rationale for revitalizing central cities, and city-suburban interdependence.

          The book includes papers that provide in-depth examinations of zoning policy in relation to patterns of suburban development; regionalism in transportation and air quality; the geography of economic and social opportunity; social stratification in metropolitan areas; and fiscal and service disparities within metropolitan areas.

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