There’s scarcely any evidence that proximity to jobs matters for escaping poverty.
One of the most popular and persistent theories of urban poverty is that the poor are poor because they don’t live particularly close to jobs. John Kain popularized the “spatial mismatch” theory in the late 1960s, explaining increased and persistent urban unemployment as being a product of poor people of color increasingly concentrating in urban neighborhoods while jobs moved increasingly to distant suburbs. Notwithstanding discrimination or human capital limits, Kain reasoned that the simple distance from jobs was a key reason the poor stayed poor.
That same reasoning underlies much place-based urban development policy. Implicitly, the strategy behind opportunity zones is that it will create more investment and jobs close to where poor people live and arguably, improve their economic opportunities accordingly.
But is distance from jobs a particularly important reason for unemployment? A new paper from UCLA’s Michael Lens and co-authors uses data on the employment prospects and earnings of housing choice voucher recipients to explore the connections between job access and economic success.
Housing choice vouchers are the federal housing subsidies that are portable across locations, allowing recipients to rent private housing, and using the voucher to pay all or a portion of rent. Lens, McClure and Mast use data on voucher locations to track the residence and movement of low income households.
Lens, McClure and Mast construct an index of job accessibility which measures how close each voucher recipient is to jobs in a region. Importantly, their accessibility measure controls for accessibility relative to labor market competition. So a place scores high in accessibility if their are a high number of jobs relative to the number of workers nearby.
The authors also focus their attention on the lower skill/lower-wage end of the labor market, looking at the availability of lower wage employment (the kind of entry level and modest skilled jobs voucher holders are most likely to qualify for) and the competition they face from other workers with similar skill levels.
The study focuses particular attention on households that see an increase in their incomes, and who move from place to place within a metropolitan area, to better understand the relationship between job proximity and economic success. In general, they find essentially no correlation between proximity to jobs and increased earnings for housing voucher recipients. If anything, the relationship is negative: those with increased earnings tend to live further from jobs (or move away from jobs as their incomes rise. The authors summarize their findings:
. . .work-able housing choice voucher households in the United States are not likely to be any closer to jobs than are not work-able HCV households, which suggests that being near job centers is not a high priority when HCV households in the workforce consider where to locate. Further, we do not find any evidence that an increase in earned income results when HCV households use their vouchers to locate closer to job centers. . . . These results clearly indicate that earned incomes and job proximity are not strongly related for voucher households. The findings suggest that job proximity is perhaps an overrated concern in policy and research on neighborhood opportunity.
It seems likely, the author’s speculate, that voucher holders who experience increased earnings move to neighborhoods with more amenities (safer streets, better schools), even though such neighborhoods are further from jobs. This suggests that neighborhood quality, rather than job proximity, is more important to household well-being.
This study adds to a growing body of evidence that within urban areas, the number of nearby jobs is not a particularly important determinant of whether households live in poverty or not.
As we pointed out sometime back, in absolute terms, city residents, the poor and black residents have higher absolute levels of job access than suburban residents, the non-poor and white residents. According to data compiled by the Brookings Institution, despite job decentralization, and the fact that poorer neighborhoods often themselves support fewer local businesses and jobs, the poor residents of the typical large metropolitan area have about 20 percent more jobs within typical commuting distance than do their non-poor counterparts. The black residents of large U.S. metropolitan areas are have on average about 50 percent more jobs within typical commuting distance than their white counterparts in the same metropolitan area.
The same seems to hold for lifetime earnings of kids growing up in “job poor” and “job rich” neighborhoods. Raj Chetty and his colleagues used a similar measure to examine the relationship between job proximity and job growth and intergenerational economic mobility. At both the neighborhood and the metropolitan level, they found almost no correlation between job proximity or job growth and the lifetime earnings of kids.
The Lens, McClure and Mast study casts further doubt on the idea of visualizing the spatial mismatch within metropolitan areas as a major contributor to persistent poverty. Just creating more jobs closer to low income neighborhoods is unlikely to reduce poverty. Without the skills, support systems and personal networks needed to qualify for, find, and hold jobs, especially ones that lead to successively greater opportunity, propinquity is likely to be of limited value.
Michael Lens, Kirk McClure and Brent Mast, “Does Jobs Proximity Matter in the Housing Choice Voucher Program?”, Cityscape: A Journal of Policy Development and Research • Volume 21, Number 1 • 2019