Journal Article

Why Aren’t More People Working in Low- and Moderate-Income Areas?


Abstract: Although the U.S. labor market has seen strong growth in recent years, labor market conditions have been weaker in low- and moderate-income (LMI) communities. In particular, residents in LMI communities are much less likely to work than residents in higher-income (non-LMI) communities. As of 2017, 35 percent of residents in LMI communities age 18–64 were not working compared with 24.9 percent in non-LMI communities. In this article, I use a formal text analysis of a unique set of survey comments to examine prominent obstacles to working, and compare the prevalence of these obstacles, or “employment barriers,” in LMI and non-LMI communities. I find that lower educational attainment and lack of access to transportation and childcare are among the most prominent barriers to employment, and these problems are especially prevalent in LMI communities. Although public assistance, disabilities, and chronic health conditions are considerably more prevalent in LMI communities, they are not especially prominent barriers in the text analysis.

Keywords: Low and Moderate Income communities; Labor market;

JEL Classification: J30; J40;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Review

Publication Date: 2019

Issue: Q IV

Pages: 41-72