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Search Intensity, Cost of Living and Local Labour Markets in Britain

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  • Patacchini, Eleonora
  • Zenou, Yves

Abstract

A model is considered in which optimal search intensity is a result of a trade-off between short-run losses due to higher search costs (more interviews, commuting...) and long-run gains due to a higher chance to find a job. We show that this optimal search intensity is higher in areas characterized by larger cost of living and/or higher labour market tightness. We then test this model using county-level data in England for the period 1991-2000. As predicted by the theoretical model, both the county cost of living and the county labour market tightness are found to have a positive and significant effect on the county search intensity. We also find positive spatial correlation between counties (i.e. clustering of counties with similar level of search intensity) and strong spatial spillover effects.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3722.

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Date of creation: Jan 2003
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Handle: RePEc:cpr:ceprdp:3722

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Keywords: dynamic panel data; GMM estimation; job matching; measurement errors; search intensities; spatial correlation;

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References

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Citations

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Cited by:
  1. GOBILLON Laurent & SELOD Harris & ZENOU Yves, 2007. "The mechanisms of spatial mismatch," Research Unit Working Papers 0701, Laboratoire d'Economie Appliquee, INRA.
  2. Sabrina Di Addario, 2005. "Job Search in Thick Markets: Evidence from Italy," Economics Series Working Papers 235, University of Oxford, Department of Economics.
  3. E. Moreno-Galbis & H.R. Sneessens, 2007. "Low-skilled unemployment, capital-skill complementarity and embodied technical progress," Recherches économiques de Louvain, De Boeck Université, vol. 73(3), pages 241-272.
  4. Moreno-Galbis, E., 2006. "Unemployment and endogenous growth with new technologies-skill complementarity," Economic Modelling, Elsevier, vol. 23(2), pages 364-386, March.
  5. GOBILLON Laurent & SELOD Harris, 2007. "The effects of segregation and spatial mismatch on unemployment: evidence from France," Research Unit Working Papers 0702, Laboratoire d'Economie Appliquee, INRA.
  6. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2007. "The Effect of Location on Finding a Job in the Paris Region," CEPR Discussion Papers 6199, C.E.P.R. Discussion Papers.
  7. Eva, MORENO-GALBIS, 2004. "Unemployment and Endogenous Growth with Capital-Skill Complementarity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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