Different Types of Spatial Mismatch: A U.S.-China Comparison of Poverty Concentration and Low-Skill Job Distribution Yingling Fan and Tieshan Sun © 2012 Lincoln Institute of Land Policy Lincoln Institute of Land Policy Working Paper The findings and conclusions of this Working Paper reflect the views of the author(s) and have not been subject to a detailed review by the staff of the Lincoln Institute of Land Policy. Contact the Lincoln Institute with questions or requests for permission to reprint this paper. [email protected] Lincoln Institute Product Code: WP13YF1 Abstract This paper presents detailed case studies of the jobs-housing mismatch phenomenon in Beijing, China and the Twin Cities metropolitan region in the U.S. By examining poverty concentration and low-skill job distribution patterns in the two study regions, the case studies demonstrate that jobs-housing mismatches exist and negatively affect job accessibility of the working poor in both regions. However, marked differences exist between the two regions in terms of appearances as well as the potential consequences of the jobs-housing mismatch phenomenon. The differences suggest that the U.S. experience in combating the job-housing mismatch cannot be directly applied in China. How existing U.S. spatial mismatch mitigation strategies could be used in the context of Chinese cities merits additional research and discussion. Keywords: People’s Republic of China, Development, Globalization, Housing, Job Sprawl, Planning, Poverty, Urban About the Authors Yingling Fan is McKnight Land-Grant Assistant Professor at the Humphrey School of Public Affairs, University of Minnesota. Fan studies the health and social impacts of urban land use, growth management, and transit improvement. She has a PhD in city planning from the University of North Carolina at Chapel Hill. Her recent work includes topics of employment accessibility and social mobility, regional economic competitiveness, and transit development, along with access to green space and opportunities for healthy physical activity, all informed by a strong social equity perspective. Yingling Fan Assistant Professor Humphrey School of Public Affairs University of Minnesota 301 19th Avenue South Minneapolis, MN 55455 Tel: (612) 626 2930 Email: [email protected] Dr. Tieshan Sun received his PhD degree in planning from the University of Southern California, and is an associate professor of urban and regional economics at the School of Government, Peking University, China. He is interested in research in urbanization and urban growth, urban spatial structure, regional development and planning, and urban and regional development in China. He is currently involved in research projects funded by the national science foundation of China and the national social science foundation of China, including the spatial evolution, mismatch and interaction of population and employment distributions in China’s large cities, and the economic performance of the spatial structures of China’s metropolitan regions. Tieshan Sun Associate Professor School of Government Peking University 5 Yi He Yuan Road Haidian District, Beijing 100871 P.R. China Tel: +86 10 6275 1154 Email: [email protected] Table of Contents 1. Introduction ................................................................................................................................. 1 2. Data and Study Area ................................................................................................................... 3 3. Analysis and Findings ................................................................................................................. 4 3.1 Poverty Concentration ...................................................................................................... 4 3.2 Low-Skill Job Distribution ............................................................................................... 7 4. Discussion and Conclusions ....................................................................................................... 9 References ..................................................................................................................................... 11 Different Types of Spatial Mismatch: A U.S.-China Comparison of Poverty Concentration and Low-Skill Job Distribution 1. Introduction Urban economists and sociologists have long considered poor access to jobs to be an important factor explaining disadvantage in the labor market, especially since John Kain formulated the spatial mismatch hypothesis (Glaeser, Hanushek, & Quigley, 2004; Gobillon, Selod, & Zenou, 2007). Kain’s hypothesis focused mainly on African Americans in the U.S context. The hypothesis states that racial discrimination in the housing market, exacerbated by the decentralization of jobs to suburbs and limited transportation options, contributes to poor employment outcomes among U.S. African American urban residents (Kain, 1968). Over time, the spatial mismatch literature has begun to shift its focus on African Americans to other disadvantaged population groups such as Latinos, low-income single mothers, welfare recipients and immigrants. Evidence shows that these disadvantaged groups also experience poor job accessibility (Blumenberg, Ong, & Mondschein, 2002; McLafferty & Preston, 1996a; Preston, McLafferty, & Liu, 1998; F. Wang, 2003) and their poor job accessibility is relevant to their disadvantage in the labor market (Allard & Danziger, 2002; Korsu & Wenglenski; McLafferty & Preston, 1996b; Parks, 2004; Raphael, 1998). Much of the previous empirical research in this field has been undertaken by U.S. researchers, and thus focuses on the specific context of U.S cities. One reason for this is that US cities have characteristics that are more conductive to jobs-housing mismatch and poor job accessibility. Compared with European cities or cities in developing countries like China, U.S. cities are generally more spread out, and have lower density of jobs and population (Korsu & Wenglenski, 2010). With stronger car dependency, U.S. cities typically have less developed public transit networks than European cities and cities in China. As such, an individual without car access almost necessarily faces poor job accessibility. U.S. cities are also notable for their relatively high levels of social and racial segregation, providing only limited residence location choices for low-income minorities. Chinese cities, compared with their U.S. counterparts, are often presumed to be more resistant to job accessibility issues. The supposed hallmarks of Chinese cities, including higher densities with greater proximity between jobs and housing, efficient public transit networks, and lower levels of social segregation (Kenworthy & Hu, 2002; Knaap & Zhao, 2009), are believed to reduce the risk of uneven access to job opportunities between population groups with different socio-economic status. However, these differences between U.S. and Chinese cities may have been exaggerated. Many Chinese cities have experienced urban sprawl affecting both jobs and housing over the past two decades (Deng & Huang, 2004; Jiang, Liu, Yuan, & Zhang, 2007; E. Wang, Song, & Xu; Wu & Yeh, 1999). Public transit systems in Chinese cities are efficient with frequent services and extensive network coverage, but increased road congestion has made long-distance trips difficult Page 1 to achieve by transit within a reasonable amount of time (Pendakur, 1993; Shen, 1997). In large cities such as Beijing and Shanghai, buses are running at an average speed of around 10 kilometers per hour, which is slower than the average speed of bicycles (Shen, 1997). These land use and transportation trends, coupled with two other important phenomena in Chinese cities— status-based discrimination and affordable housing shortage—may have already put disadvantaged groups at high risk for poor job accessibility. In China, race and ethnicity have an only moderate connection with socio-economic status, which are not major sources of discrimination. However, other types of discrimination are serious, especially the institutional-level discrimination against urban migrant workers. China’s household registration system (hukou) classifies individuals according to their place of presumed regular residence (suozaidi). Migrants who live outside their officially-registered areas are often denied state-provided education, housing, social security, and economic opportunities (Chan & Zhang, 1999; Fan, 2002). In 2010, there were 221.4 million migrants in China, if that category is defined as migrants who moved between cities or counties and left their officially-registered areas for six months or more (National Bureau of Statistics, 2011). Migrants are permitted to work in cities on the basis of temporary residence permits, but have much less access to government subsidies and in several respects they occupy a social and economic status similar to illegal immigrants (Fan, 2001). Housing prices in Chinese cities have been on a steep rise since 1998 when China introduced several major policy initiatives to end the distribution of housing by employers and set up new housing finance and market systems (Y. P. Wang, 2001). These policy initiatives include individual mortgage loan programs, economic incentive programs for private development companies and abolishment of welfare allocation of housing by working units (Jim & Chen, 2006; Y. P. Wang, 2001). A 2007 assessment found that sales prices of new residential apartments rose by 10.6% on a yearly