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Equilibrium Urban Unemployment

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  • Wasmer, E.
  • Zenou, Y.

Abstract

We introduce a spatial dimension in a search equilibrium unemployment model. By assuming that workers'search efficiency decreases with the distance to the employment-center, two urban equilibrium configurations emerge: either the unemployed reside close to the employment-center or far away from it, depending on the values of the commuting costs and of the surplus associated with search, which depends on the labor market equilibrium. The labor market equilibrium itself depends crucially on these urban equilibria. We show that the unemployment level is lower in the first urban equilibrium.

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Bibliographic Info

Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 97-15.

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Date of creation: 1997
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Handle: RePEc:del:abcdef:97-15

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Cited by:
  1. Richard Arnott, 1997. "Economic Theory and the Spatial Mismatch Hypothesis," Boston College Working Papers in Economics 390., Boston College Department of Economics.
  2. Zenou, Y., 1999. "Urban Unemployment and City Formation. Theory and Policy Implications," Papers, Stockholm - International Economic Studies 662, Stockholm - International Economic Studies.
  3. Thisse, J.-F. & Zenou, Y., . "Segmentation et marchés locaux du travail," CORE Discussion Papers RP -1306, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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