Getting To Work: Experimental Evidence On Job Search And Transportation Costs

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Do transportation costs constrain job search in urban low wage labor markets? I test this question by providing transit subsidies to randomly selected clients of a non-profit employment agency. The subsidies generate a large, short-run increase in search intensity for a transit subsidy group relative to a control group receiving standard job search services but no transit subsidy. In the first two weeks, individuals assigned to the transit subsidy group apply and interview for 19% more jobs than those not receiving subsidies. The subsidies generate the greatest increase in search intensity for individuals living far from employment opportunities. Some suggestive evidence indicates that greater search intensity translates into shorter unemployment durations. These results provide experimental evidence in support of the theory that search costs over space can depress job search intensity, contributing to persistent urban poverty in neighborhoods far from job opportunities. (C) 2014 Elsevier B.V. All rights reserved.