The Mechanisms of Spatial Mismatch

The spatial mismatch hypothesis (SMH) argues that low-skilled minorities residing in US inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which is rather supportive of the SMH. Surprisingly, it is only recently that theoretical models have emerged, which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested. This article presents relevant facts, reviews the theoretical models of spatial mismatch, confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests.