The effect of social networks and concentrated poverty on black and hispanic youth unemployment

This paper examines empirically the effect of spatially concentrated poverty on minority youth employment and the role of "access" in youth labor markets. A model, in which information about jobs travels through social networks, links labor market outcomes and residential concentration of poverty. The empirical work uses U.S. Census employment data for the largest MSAs, in 1970 and 1980. The key findings are that, although concentration appears to have had no effect on black youth unemployment in 1970, the results for 1980 support "concentration effects" on unemployment for both black and hispanic youth. These effects are sizeable on average, and quite large in some cities.