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  • Zenou, Yves

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6197.

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Date of creation: Mar 2007
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Handle: RePEc:cpr:ceprdp:6197

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Keywords: job search; search intensity; spatial mismatch; urban land use;

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Cited by:
  1. Lehmann, Etienne & Montero Ledezma, Paola L. & Van der Linden, Bruno, 2013. "Inefficient Equilibrium Unemployment in a Duocentric Economy with Matching Frictions," IZA Discussion Papers 7828, Institute for the Study of Labor (IZA).
  2. Zenou, Yves, 2008. "Endogenous Job Destruction and Job Matching in Cities," Working Paper Series 752, Research Institute of Industrial Economics.
  3. Frédéric Gavrel, 2014. "Participation, Recruitment Selection, and the Minimum Wage," Working Papers halshs-00948453, HAL.
  4. Sabine D'Costa & Henry Overman, 2013. "The urban wage growth premium: evidence from British cities," ERSA conference papers ersa13p516, European Regional Science Association.
  5. Vincent Boitier, 2013. "Endogenous city size in urban search models: the case of high reallocation costs," ERSA conference papers ersa13p590, European Regional Science Association.

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