Employment Impact of Inner-city Development Projects: The Case of Underground Atlanta

This paper makes use of a unique data set to explore the issue of whether inner-city residents are more likely to be hired by a new inner-city development than non-residents. A selection model with partial observability is specified and estimated. This partial observability model allows us to control for self-selection at the application stage and to obtain unconditional estimates at the hiring stage. We determine, holding individual and neighbourhood characteristics constant, that while inner-city residents are less likely to be considered 'hireable', their greater propensity to apply for jobs at this development means that they were at least as likely as non-residents to both apply and be hired. We also tentatively conclude that distance between an applicant's residence and the location of the development does not appear to have been an issue in the application decision.