IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/14414.html
   My bibliography  Save this paper

Spatial Mismatches and Imperfect Information in the Job Search

Author

Listed:
  • Sequeira, Sandra
  • Banerjee, Abhijit

Abstract

Youth unemployment remains high throughout the developing world, at times coexisting with unmet demand for labor and high job turnover. This paper examines one possible explanation: young job seekers who live far from the city centres where jobs are located, over-estimate their employment prospects and underestimate actual commuting costs. Increasing access and exposure to the wider labor market leads job seekers to adjust beliefs and accept jobs closer to home. These ï¬ ndings underscore the importance of supply-side information frictions and how they can lead to spatial and occupational mistargeting in the job search.

Suggested Citation

  • Sequeira, Sandra & Banerjee, Abhijit, 2020. "Spatial Mismatches and Imperfect Information in the Job Search," CEPR Discussion Papers 14414, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14414
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP14414
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
    2. David McKenzie, 2017. "How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence," The World Bank Research Observer, World Bank, vol. 32(2), pages 127-154.
    3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    4. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1339-1398, Elsevier.
    5. Levinsohn, James & Pugatch, Todd, 2014. "Prospective analysis of a wage subsidy for Cape Town youth," Journal of Development Economics, Elsevier, vol. 108(C), pages 169-183.
    6. Daron Acemoglu & Robert Shimer, 1999. "Efficient Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 893-928, October.
    7. Abhijit Banerjee & Sendhil Mullainathan, 2010. "The Shape of Temptation: Implications for the Economic Lives of the Poor," Working Papers id:2484, eSocialSciences.
    8. Bartos, Vojtech & Bauer, Michal & Chytilova, Julie & Levely, Ian, 2018. "Effects of Poverty On Impatience," Rationality and Competition Discussion Paper Series 108, CRC TRR 190 Rationality and Competition.
    9. Jean-Pierre Benoît & Juan Dubra & Don A. Moore, 2015. "Does The Better-Than-Average Effect Show That People Are Overconfident?: Two Experiments," Journal of the European Economic Association, European Economic Association, vol. 13(2), pages 293-329, April.
    10. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1407-1440.
    11. Alan B. Krueger & Andreas I. Mueller, 2016. "A Contribution to the Empirics of Reservation Wages," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 142-179, February.
    12. Simon Franklin, 2018. "Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies," Economic Journal, Royal Economic Society, vol. 128(614), pages 2353-2379, September.
    13. Vojtech Bartos & Michal Bauer & Julie Chytilova & Ian Levely, 2018. "Effects of Poverty on Impatience: Preferences or Inattention?," CERGE-EI Working Papers wp623, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Zenou, Yves, 2009. "Endogenous job destruction and job matching in cities," Journal of Urban Economics, Elsevier, vol. 65(3), pages 323-336, May.
    15. Johannes Spinnewijn, 2015. "Unemployed But Optimistic: Optimal Insurance Design With Biased Beliefs," Journal of the European Economic Association, European Economic Association, vol. 13(1), pages 130-167, February.
    16. Stefano DellaVigna & M. Daniele Paserman, 2005. "Job Search and Impatience," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 527-588, July.
    17. John J. Conlon & Laura Pilossoph & Matthew Wiswall & Basit Zafar, 2018. "Labor Market Search With Imperfect Information and Learning," Working Papers 2018-068, Human Capital and Economic Opportunity Working Group.
    18. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 217-227.
    19. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
    20. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    21. Kets, Willemien & Sandroni, Alvaro, 2019. "A belief-based theory of homophily," Games and Economic Behavior, Elsevier, vol. 115(C), pages 410-435.
    22. Christopher A. Pissarides, 1985. "Taxes, Subsidies and Equilibrium Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 121-133.
    23. Lalith Munasinghe & Nachum Sicherman, 2000. "Why Do Dancers Smoke? Time Preference, Occupational Choice, and Wage Growth," NBER Working Papers 7542, National Bureau of Economic Research, Inc.
    24. Harry J. Holzer, 1991. "The Spatial Mismatch Hypothesis: What Has the Evidence Shown?," Urban Studies, Urban Studies Journal Limited, vol. 28(1), pages 105-122, February.
    25. Phillips, David C., 2014. "Getting to work: Experimental evidence on job search and transportation costs," Labour Economics, Elsevier, vol. 29(C), pages 72-82.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Allemand,Mathias & Kirchberger,Martina & Sveta Milusheva & Newman,Carol Frances & Roberts,Brent & Thorne,Vincent, 2023. "Conscientiousness and Labor Market Returns : Evidence from a Field Experiment in West Africa," Policy Research Working Paper Series 10378, The World Bank.
    2. Henderson, J. Vernon & Liu, Vivian, 2023. "Urban land markets and city development: Sub-Saharan Africa," LSE Research Online Documents on Economics 119388, London School of Economics and Political Science, LSE Library.
    3. A. Stefano Caria & Grant Gordon & Maximilian Kasy & Simon Quinn & Soha Shami & Alexander Teytelboym, 2020. "An Adaptive Targeted Field Experiment: Job Search Assistance for Refugees in Jordan," CSAE Working Paper Series 2020-20, Centre for the Study of African Economies, University of Oxford.
    4. Ricardo Hausmann & Tim O'Brien & Andres Fortunato & Alexia Lochmann & Kishan Shah & Lucila Venturi & Sheyla Enciso & Ekaterina Vashkinskaya & Ketan Ahuja & Bailey Klinger & Federico Sturzenegger & Mar, 2023. "Growth Through Inclusion in South Africa," CID Working Papers 434, Center for International Development at Harvard University.
    5. Beam, Emily A., 2021. "Search costs and the determinants of job search," Labour Economics, Elsevier, vol. 69(C).
    6. Bull, Owen & Muñoz, Juan Carlos & Silva, Hugo E., 2021. "The impact of fare-free public transport on travel behavior: Evidence from a randomized controlled trial," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    7. Jones, Sam & Santos, Ricardo, 2022. "Can information correct optimistic wage expectations? Evidence from Mozambican job-seekers," Journal of Development Economics, Elsevier, vol. 159(C).
    8. Sam Jones & Kunal Sen, 2022. "Labour market effects of digital matching platforms: Experimental evidence from sub-Saharan Africa," WIDER Working Paper Series wp-2022-69, World Institute for Development Economic Research (UNU-WIDER).
    9. Martin Chegere & Paolo Falco & Marco Nieddiu & Lorenzo Pandolfi & Mattea Stein, 2022. "It’s a Sure Win! Experimental evidence on overconfidence in betting behavior," CSEF Working Papers 655, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Banerjee, Abhijit & Sequeira, Sandra, 2023. "Learning by searching: Spatial mismatches and imperfect information in Southern labor markets," Journal of Development Economics, Elsevier, vol. 164(C).
    2. Duernecker, Georg & Balleer, Almut & Forstner, Susanne & Goensch, Johannes, 2023. "Wage Bargaining and Labor Market Policy with Biased Expectations," CEPR Discussion Papers 18019, C.E.P.R. Discussion Papers.
    3. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.
    4. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    5. Simon Franklin, 2015. "Location, search costs and youth unemployment: A randomized trial of transport subsidies in Ethiopia," CSAE Working Paper Series 2015-11, Centre for the Study of African Economies, University of Oxford.
    6. Kangoh Lee, 2021. "Labor market frictions, capital, taxes and employment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1329-1359, December.
    7. Nobuhiro Kiyotaki & Ricardo Lagos, 2007. "A Model of Job and Worker Flows," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 770-819, October.
    8. Simon Jäger & Benjamin Schoefer & Samuel Young & Josef Zweimüller, 2020. "Wages and the Value of Nonemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 1905-1963.
    9. Cortes, Patricia & Pan, Jessica & Pilossoph, Laura & Zafar, Basit, 2021. "Gender Differences in Job Search and the Earnings Gap: Evidence from Business Majors," IZA Discussion Papers 14373, Institute of Labor Economics (IZA).
    10. Fabien Postel-Vinay & Hélène Turon, 2010. "On-The-Job Search, Productivity Shocks, And The Individual Earnings Process," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 599-629, August.
    11. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 11, pages 973-1041, Elsevier.
    12. Simon Franklin, 2018. "Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies," Economic Journal, Royal Economic Society, vol. 128(614), pages 2353-2379, September.
    13. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
    14. Steinar Holden & Åsa Rosén, 2014. "Discrimination And Employment Protection," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1676-1699, December.
    15. Paulo Guimarães & Pedro Portugal & Sónia Torres, 2010. "The Sources of Wage Variation: An Analysis Using Matched Employer-Employee Data," Working Papers w201025, Banco de Portugal, Economics and Research Department.
    16. Aamer Abu‐Qarn & Shirlee Lichtman‐Sadot, 2022. "The Trade‐Off Between Work and Education: Evidence from Public Transportation Penetration to Arab Towns in Israel," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(1), pages 193-225, January.
    17. Shaimaa Yassin, 2013. "Structural Labor Market Transitions and Wage Dispersion in Egypt and Jordan," Working Papers 753, Economic Research Forum, revised May 2013.
    18. Lisi, Gaetano, 2013. "The Benchmark Macroeconomic Models of the Labour Market," MPRA Paper 62318, University Library of Munich, Germany.
    19. Lisi, Gaetano, 2011. "Matching Models of Equilibrium Unemployment: An Overview," MPRA Paper 30191, University Library of Munich, Germany.
    20. Pissarides, Christopher A., 2015. "Dale Mortensen: An appreciation," Research in Economics, Elsevier, vol. 69(1), pages 1-6.

    More about this item

    Keywords

    Job search; Biased beliefs; Unemployment;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:14414. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.