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Search Activities, Cost of Living and Local Labor Markets

  • Patacchini, Eleonora

    ()

    (University of Southampton)

  • Zenou, Yves

    ()

    (The Research Institute of Industrial Economics)

A model is considered in which optimal search intensity is a result of a trade off 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. This model is then tested for England on sub-regional data. We estimate a spatial error model and we find that both the local cost of living and the local labor market tightness are found to have a positive and significant effect on unemployed average search intensity. These findings are consistent with the prediction of the theoretical model.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 607.

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Length: 31 pages
Date of creation: 14 Nov 2003
Date of revision:
Handle: RePEc:hhs:iuiwop:0607
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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  1. Coulson, N Edward & Laing, Derek & Wang, Ping, 2001. "Spatial Mismatch in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 949-72, October.
  2. Smith, Tony E. & Zenou, Yves, 2003. "Spatial Mismatch, Search Effort and Urban Spatial Structure," IZA Discussion Papers 692, Institute for the Study of Labor (IZA).
  3. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration in Britain: An Analysis of Gross Flows Using NHS Central Register Data," Economic Journal, Royal Economic Society, vol. 102(415), pages 1433-50, November.
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  13. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
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  17. Sato, Yasuhiro, 2001. "Labor Heterogeneity in an Urban Labor Market," Journal of Urban Economics, Elsevier, vol. 50(2), pages 313-337, September.
  18. McCormick, Barry & Sheppard, Stephen, 1992. "A Model of Regional Contraction and Unemployment," Economic Journal, Royal Economic Society, vol. 102(411), pages 366-77, March.
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