ABSTRACT
This chapter develops a model to estimate the effect of near-the-neighborhood labor demand on two neighborhood employment status conditions: neighborhood unemployment and the proportion of neighborhood residents in the labor force employed in or near the neighborhood, the "local working rate. Unemployment rates vary widely over small neighborhood areas, due in large part to differences in labor supply characteristics. The potential for nearby labor demand to affect neighborhood unemployment should be especially strong in the case of large, densely populated metropolitan areas with significant traffic congestion such as Chicago, where commute times can be substantial. While unemployment rates can vary over very small neighborhood areas, neighborhood residents seeking and finding nearby jobs are more likely to find work in some larger, surrounding area. In addition to the goal of reduced unemployment, a secondary objective of neighborhood economic development policy is to provide nearby jobs for the labor force of the neighborhood.
