Spatial mismatch, wages and unemployment in metropolitan areas in Brazil

Abstract

Abstract. The spatial mismatch hypothesis states that a lack of connection to job opportunities may affect an individual's prospects in the labour market, especially for low-skilled workers. This phenomenon is especially observed in large urban areas, in which low-skilled minorities tend to live far away from jobs and face geographical barriers to finding and keeping jobs. This paper aims to investigate whether this negative relationship between spatial mismatch and labour market outcomes is valid in Brazil after controlling for individual characteristics. Our conclusions indicate that there is no clear relation between different measures of accessibility to jobs and the probability of being unemployed. However, for wages there is a clear correlation, which is stronger in larger metropolitan areas than in the country and has a more detrimental effect for low-skilled workers. This paper contributes to the literature by investigating the spatial mismatch in urban labour markets in Brazil. For the empirical literature in the country, this is an original contribution, as the comparison of intra-urban labour market dynamics of different urban areas provide a more comprehensive perspective of the role city size may play in local labour markets. Given the exploratory nature of this work, our results still rely on strong identification hypotheses to avoid potential bias related to simultaneous location decisions of workers and firms within the city. Even if these conditions do not hold, the results are still meaningful as they provide a better understanding of the conditional distribution of wages and the unemployment rate in the biggest metropolitan areas of Brazil.JEL classification: R32, J64, J31

Spatial Mismatch, Different Labor Markets and Precarious Employment: The Case of Hong Kong

“…Delmelle and colleagues' study (2021), for example, finds no significant impact of improved job accessibility on the unemployment rates among low-income workers while finds significant positive association between job accessibility and median household income in that region. Barufi and Haddad (2017) have also found strong correlations between spatial mismatch and workers' wages. Researchers, thus, argue that improved job accessibility leads to better employment opportunities that offer higher income for workers to choose from (Barufi & Haddad, 2017;Delmelle et al, 2021).…”

“…Barufi and Haddad (2017) have also found strong correlations between spatial mismatch and workers' wages. Researchers, thus, argue that improved job accessibility leads to better employment opportunities that offer higher income for workers to choose from (Barufi & Haddad, 2017;Delmelle et al, 2021). Beyond income, living in areas with limited employment opportunities and concentrated poverty, people also face stiffer competition for existing stable employment.…”

The relevance of job accessibility to labour market outcomes: Evidence for the São Paulo metropolitan region

“…Barufi and Haddad (2017) used information from the 2010 Demographic Census and census Weighting Areas as the unit of analysis to estimate the associations between wages and distance to the CBD of 20 Brazilian metropolitan regions. The results indicated a negative association between distance to the CBD and wage.…”

“…Their results also indicated that job accessibility (measured considering the number of jobs accessed by a trip of up to 40 minutes by public transport) was negatively associated with the probability of unemployment. Barufi and Haddad (2017) used information from the 2010 Demographic Census and census Weighting Areas as the unit of analysis to estimate the associations between wages and distance to the CBD of 20 Brazilian metropolitan regions. The results indicated a negative association between distance to the CBD and wage.…”

A Review of Spatial Mismatch Research: Empirical Debate, Theoretical Evolution and Connotation Expansion

“…Female workers also present frequent employment disadvantages due to occupational segmentation and family responsibilities in the process of suburbanization of employment [49]. Other disadvantaged groups, such as immigrants [50], low-skilled [51], low-income groups [52,53], entry-level workers [54], individuals recently released from prison [55], and welfare-recipients [56], have entered the study of spatial mismatch in America.…”