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Endogenous job destruction and job matching in cities

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  • Zenou, Yves

Abstract

We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their jobs can be hit by a technological shock which decreases their productivity. They reside in a city, and commuting to the job center involves both pecuniary and time costs. As a result, workers with high wages are willing to live closer to jobs to save on time commuting costs. We show that, in equilibrium, there is a one-to-one correspondence between the productivity space and the urban location space. Workers with high productivities and wages reside close to jobs, have low per distance commuting costs and pay high land rents. We also show that higher per distance commuting costs and higher unemployment benefits lead to more job destruction.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 65 (2009)
Issue (Month): 3 (May)
Pages: 323-336

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Handle: RePEc:eee:juecon:v:65:y:2009:i:3:p:323-336

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Job search Commuting costs Wage distribution Urban land use;

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References

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Citations

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Cited by:
  1. Giovanni Russo & Peter Nijkamp & Aura Reggiani & Federico Tedeschi, 2011. "Commuters' effect on local labour markets: A german case study," ERSA conference papers ersa10p1376, European Regional Science Association.
  2. Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2014. "Commuter Effects on Local Labour Markets: A German Modelling Study," Urban Studies, Urban Studies Journal Limited, Urban Studies Journal Limited, vol. 51(3), pages 493-508, February.
  3. Blien, Uwe & Messmann, Susanne & Trappmann, Mark, 2012. "Do reservation wages react to regional unemployment?," IAB Discussion Paper 201222, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Kawata, Keisuke & Sato, Yasuhiro, 2012. "On-the-job search in urban areas," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(4), pages 715-726.
  5. Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2011. "Commuter Effects on Local Labour Markets: A German Modelling Study," Tinbergen Institute Discussion Papers 11-114/3, Tinbergen Institute.
  6. Tse, Chung-Yi, 2010. "Thick market externalities in a spatial model," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 40(2-3), pages 92-105, May.
  7. Zenou, Yves, 2009. "Search in cities," European Economic Review, Elsevier, vol. 53(6), pages 607-624, August.

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