Advanced Search
MyIDEAS: Login to save this paper or follow this series

Space, Search and Efficiency


Author Info

  • Wasmer, Etienne

    (Sciences Po, Paris)

  • Zenou, Yves

    (Stockholm University)


We investigate the role of spatial frictions in search equilibrium unemployment. For that, we develop a model of the labor market in which workers’ location in an agglomeration depends on commuting costs, the endogenous price of land and the value of job search and employment. We first show that there exists a unique and stable market equilibrium in which both land and labor markets are solved for simultaneously. We then compare this decentralized equilibrium to a social planner’s optimum and we find that distortions (subventions or imperfect competition in the transport market) modify the usual Hosios efficiency condition. Indeed, the social planner needs to adjust the transportation spending of the decentralized equilibrium. Given differences in commuting costs between the employed and the unemployed, this is realized by a change in the fraction of unemployed workers: the socially optimal number of unemployed workers depends both of matching externalities and on distortions in the transport market. In absence of these distortions and despite spatial terms in wages, the standard condition holds: a spatial efficient equilibrium may thus occur. We however show that space has still an important role on the interaction between land and labor markets, and decompose the equilibrium unemployment rate into two parts: a pure non-spatial one (which corresponds to the standard matching model) and a mixed of non-spatial and spatial elements, the first element amplifying the other one.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 181.

as in new window
Length: 34 pages
Date of creation: Aug 2000
Date of revision:
Publication status: published in: Journal of Urban Economics, 2002, 51(3), 515-541
Handle: RePEc:iza:izadps:dp181

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page:

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Related research

Keywords: job matching; job access; Local labor markets; welfare;

Find related papers by JEL classification:


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Thierry Debrand & Claude Taffin, 2005. "The Structural and Cyclical Factors of Residential Mobility Over The Last 20 Years," Economie et Statistique, Institut National de la Statistique et des Etudes Economiques, vol. 381, pages 125-146, October.
  2. Andersson, Fredrik & Konrad, Kai A, 2001. "Globalization and Human Capital Formation," CEPR Discussion Papers 2657, C.E.P.R. Discussion Papers.
  3. Larsen, Morten Marott, 2002. "Location of the labour force in an interregional general equilibrium model," ERSA conference papers ersa02p281, European Regional Science Association.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp181. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.