Efficiency wages, involuntary unemployment and urban spatial structure
AbstractThe labor market model is developed within an urban spatial context, where it is shown that effeciency-wage policies can lead to significant levels of involuntary unemployment. Commuting cost differences between workers and nonworkers tend to increase unemployment, and competition for land tends to segregate workers and non-workers, with nonworkers relegated to the urban fringe. These findings are extended to a two-city system, where it is shown that even with free mobility of workers, significant wage and unemployment differentials can exist between cities characterized by different levels of productivity.
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Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 25 (1995)
Issue (Month): 4 (August)
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Web page: http://www.elsevier.com/locate/regec
Other versions of this item:
- Zenou, Y. & Smith, T. E., . "Efficiency wages, involuntary unemployment and urban spatial structure," CORE Discussion Papers RP -1171, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- ZENOU, Yves & SMITH, Tony E., 1994. "Efficiency Wages, Involuntary Unemployment and Urban Spatial Structure," CORE Discussion Papers 1994076, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
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