Spatial Mismatch : An Equilibrium Analysis

The spatial mismatch hypothesis, first stated by Kain (1968), argues that job decentralization in U.S. cities has contributed to low incomes and high unemployment rates for black Americans. Decentralization relocates job sites to white suburban communities far from the CBD, and housing segregation prevents blacks from relocating their residences near the new workplaces. The purpose of the paper is to analyze an urban equilibrium with spatial mismatch. Despite the existence of a suburban employment center, blacks in the model are forced to live in the central zone they occupied in the original monocentric city, commuting across the white residential area to access suburban jobs. This quot;mismatchquot; equilibrium is contrasted with an unrestricted equilibrium, where blacks are free to locate adjacent to the suburban center. It is shown that black welfare is lower in the mismatch equilibrium than in the unrestricted equilibrium. Whites are unaffected or better off