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Matching, centrality and the urban network

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  • Schmutz-Bloch, Benoît
  • Sidibé, Modibo

Abstract

We propose a search and matching model of the urban network. When geography is fixed and the job finding rate decreases with distance, the interplay between firm entry and worker migration generates an equilibrium allocation in which productive agents cluster in a few large central cities where matching is more assorted and profitable, while many small peripheral cities retain low-skilled workers. Counterfactual experiments suggest that (i) small transfers to the periphery hurt everyone, while large transfers can achieve a more efficient, decentralized organization; (ii) lower frictions deconcentrate the network and benefit everyone.

Suggested Citation

  • Schmutz-Bloch, Benoît & Sidibé, Modibo, 2024. "Matching, centrality and the urban network," Journal of Urban Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:juecon:v:144:y:2024:i:c:s0094119024000767
    DOI: 10.1016/j.jue.2024.103706
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    More about this item

    Keywords

    City size distribution; Centrality; Local labor market; On-the-job search; Migration;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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