"The microgeography of unemployment and the role of transport networks"

joint with M. Ubeda (INRAE)

Abstract :
Unemployment rates significantly differ across neighborhoods in large urban areas. Using Paris as a case study, we present new evidence of expanding disparities in unemployment rates, despite increased labor market integration. We propose a novel spatial equilibrium model, encompassing classical and frictional unemployment, effectively replicating these trends. We then analyze the impact of major transportation infrastructures on reducing unemployment in disadvantaged areas. Contrary to expectations, improved connectivity often raises unemployment rates in such neighborhoods due to increased competition from more productive workers originating from the broader urban region. We validate our hypothesis using the creation of the Paris Regional Express Rail. This confirms that better transport, initially linked to higher unemployment, can elevate localized joblessness.