Unemployment: Location and Connections

Persistent regional unemployment disparities have been characterized as a major cause of regional decay and impose significant costs on communities (Bill, 2005; Mitchell & Bill, 2004). Macroeconomic explanations for the persistence of unemployment often revolve around economic factors, including spatial changes in the skill requirements of jobs, migration of jobs to the suburbs, persistent demand constraints, wage differentials, low labor mobility and related structural impediments, and variations in the distribution of industries across space (see reviews, for example, in Ihlanfeldt and Sjoquist (1998) and Ramakrishnan and Cerisola (2004)). Outside traditional macroeconomic explanations of unemployment at the local area level (e.g., suburb), explanations draw on theories of residential segregation (Cheshire, Monastiriotis, & Sheppard, 2003; Hunter, 1996), which suggest that similar educational background and socioeconomic status along with housing market factors play a substantial role in determining how people are distributed across geographic space. Over time, these differences may become more pronounced as people sort further along lines of race and income (Bill, 2005). Cheshire et al. argued that where people live does not drive inequality but rather determines geographic location of inequality: