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Search Activities, Cost of Living and Local Labor Markets

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  • Patacchini, Eleonora

    () (University of Southampton)

  • Zenou, Yves

    () (The Research Institute of Industrial Economics)

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 of finding a job. We show that this optimal search intensity is higher in areas characterized by larger cost of living and/or higher labor market tightness. This model is then tested for England on sub-regional data. We estimate a spatial error model and we find that both the local cost of living and the local labor market tightness are found to have a positive and significant effect on unemployed average search intensity. These findings are consistent with the prediction of the theoretical model.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 607.

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Length: 31 pages
Date of creation: 14 Nov 2003
Date of revision:
Handle: RePEc:hhs:iuiwop:0607

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Keywords: Job Matching; Search Intensities; Spatial Correlation;

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References

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  1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877.
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  7. Coulson, N Edward & Laing, Derek & Wang, Ping, 2001. "Spatial Mismatch in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 949-72, October.
  8. Burda, Michael C. & Profit, Stefan, 1996. "Matching across space: Evidence on mobility in the Czech Republic," Labour Economics, Elsevier, vol. 3(3), pages 255-278, October.
  9. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  10. Smith, Tony E & Zenou, Yves, 2003. "Spatial Mismatch, Search Effort and Urban Spatial Structure," CEPR Discussion Papers 3731, C.E.P.R. Discussion Papers.
  11. Gavin Cameron & John Muellbauer, 2001. "Earnings, unemployment, and housing in Britain," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 203-220.
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  14. Topa, Giorgio, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 68(2), pages 261-95, April.
  15. Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May.
  16. Sato, Yasuhiro, 2001. "Labor Heterogeneity in an Urban Labor Market," Journal of Urban Economics, Elsevier, vol. 50(2), pages 313-337, September.
  17. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration in Britain: An Analysis of Gross Flows Using NHS Central Register Data," Economic Journal, Royal Economic Society, vol. 102(415), pages 1433-50, November.
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Citations

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Cited by:
  1. 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.
  2. Di Addario, Sabrina, 2011. "Job search in thick markets," Journal of Urban Economics, Elsevier, vol. 69(3), pages 303-318, May.
  3. Gobillon, Laurent & Selod, Harris & Zenou, Yves, 2005. "The mechanisms of spatial mismatch," CEPR Discussion Papers 5346, C.E.P.R. Discussion Papers.
  4. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2007. "The Effect of Location on Finding a Job in the Greater Paris Area," IZA Discussion Papers 2848, Institute for the Study of Labor (IZA).
  5. Laurent Gobillon & Thierry Magnac & Harris Selod, 2007. "The Effect of Location on Finding a Job in the Paris Region," Working Papers 2007-05, Centre de Recherche en Economie et Statistique.
  6. Zenou, Yves, 2007. "Search in Cities," CEPR Discussion Papers 6197, C.E.P.R. Discussion Papers.
  7. Yannick L?Horty & Emmanuel Duguet & Loic Du Parquet & Pascale Petit & Florent Sari, . "The effect of place of residence on access to employment : a field experiment on qualified young job applicants in Ile-de-France," Papers 2011-02, TEPP Working Papers.
  8. Détang-Dessendre, Cécile & Gaigné, Carl, 2009. "Unemployment duration, city size, and the tightness of the labor market," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 266-276, May.

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