Spatial mismatch and costly suburban commutes: Can commuting subsidies help?

Proponents of the spatial mismatch hypothesis argue that job decentralisati on harms low-income residents of central cities because of barriers that li mit their access to suburban labour markets. Such barriers can take the for m of housing discrimination, exclusionary zoning or long and difficult comm utes. This paper uses an urban equilibrium model of spatial mismatch to ana lyse the impact of commuting subsidies on the welfare of low-income, centra l-city households with restricted mobility. Specifically, it seeks to deter mine how effective such subsidies are at reducing the welfare impact of spa tial mismatch. While subsidised outward commuting is found to raise the wel fare of the low-income households, the welfare gains are only a small porti on of the welfare loss due to spatial mismatch.