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Job search in thick markets

  • Di Addario, Sabrina

I analyze empirically the effects of urban and industrial agglomeration on both search behavior and the efficiency of matching. The analysis is based on a unique panel data set from the Italian Labor Force Survey micro-data, covering 520 randomly drawn Local Labor Market Areas (66% of the total) over the four quarters of 2002. I compute transition probabilities from non-employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched. I then test whether these are affected by market size, industrial variety and/or industry specialization. The main results indicate that market size and industry-specialization raise job seekers' chances of finding employment (conditional on having searched), while industrial variety is not significantly different from zero. Finally, the effect of agglomeration on non-employed individuals' search behavior cannot be significantly distinguished from zero.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 69 (2011)
Issue (Month): 3 (May)
Pages: 303-318

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Handle: RePEc:eee:juecon:v:69:y:2011:i:3:p:303-318
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