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

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  • Patacchini, Eleonora

    ()
    (Syracuse University)

  • Zenou, Yves

    ()
    (Stockholm University)

Abstract

A model is considered in which optimal search intensity is a result of a tradeoff 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. 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) labor 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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 772.

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Length: 36 pages
Date of creation: May 2003
Date of revision:
Publication status: published in: Regional Science and Urban Economics, 2006, 36(2), 227-248
Handle: RePEc:iza:izadps:dp772

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Related research

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

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  1. 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.
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Citations

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Cited by:
  1. Eva, MORENO-GALBIS & Henri R., SNEESSENS, 2004. "Low-Skilled Unemployment, Capital-Skill Complementarity and Embodied Technical Progress," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Gobillon, Laurent & Selod, Harris & Zenou, Yves, 2005. "The mechanisms of spatial mismatch," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5346, C.E.P.R. Discussion Papers.
  3. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2007. "The Effect of Location on Finding a Job in the Paris Region," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6199, C.E.P.R. Discussion Papers.
  4. Sabrina Di Addario, 2006. "Job Search in Thick Markets: Evidence from Italy," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 605, Bank of Italy, Economic Research and International Relations Area.
  5. Laurent Gobillon & Harris Selod, 2007. "The Effects of Segregation and Spatial Mismatch on Unemployment : Evidence from France," Working Papers, Centre de Recherche en Economie et Statistique 2007-04, Centre de Recherche en Economie et Statistique.
  6. 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).
  7. Moreno-Galbis, E., 2006. "Unemployment and endogenous growth with new technologies-skill complementarity," Economic Modelling, Elsevier, Elsevier, vol. 23(2), pages 364-386, March.

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