Search in Cities

45 Pages Posted: 20 May 2008

See all articles by Yves Zenou

Yves Zenou

Monash University - Department of Economics; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR); Stockholm University

Date Written: March 2007

Abstract

We develop different spatial search models in which a land market is embedded into a standard search matching framework. The link between the land and the labour market is realized through the average search intensity of unemployed workers. We first develop a simple model where search intensity is exogenous. Because of this assumption, only one urban pattern emerges in which the employed reside close to jobs and the unemployed at the periphery of the city. We then extend this benchmark model by assuming that workers' search intensity negatively depends on their residential distance to jobs. This leads to two urban-land use patterns where the unemployed workers either reside close to or far away from jobs. Finally, we consider the case where the unemployed workers endogenously choose their search intensity and we show that they search less, the further away they reside from jobs. Apart from the two previous urban patterns, there is a third equilibrium that emerges, which has a core-periphery structure. In each model, we explore the labour market outcomes (job creation, unemployment and wages) of the different urban land use patterns.

Keywords: Job search, search intensity, spatial mismatch, urban land use

JEL Classification: D83, J15, J41, R14

Suggested Citation

Zenou, Yves, Search in Cities (March 2007). CEPR Discussion Paper No. DP6197, Available at SSRN: https://ssrn.com/abstract=1134238

Yves Zenou (Contact Author)

Monash University - Department of Economics ( email )

Australia

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

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