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Search Activities, Cost of Living and Local Labor Markets

Author

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  • Patacchini, Eleonora

    (University of Southampton)

  • Zenou, Yves

    (The Research Institute of Industrial Economics)

Abstract

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.

Suggested Citation

  • Patacchini, Eleonora & Zenou, Yves, 2003. "Search Activities, Cost of Living and Local Labor Markets," Working Paper Series 607, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0607
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    References listed on IDEAS

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    Cited by:

    1. Laurent Gobillon & Harris Selod & Yves Zenou, 2007. "The Mechanisms of Spatial Mismatch," Urban Studies, Urban Studies Journal Limited, vol. 44(12), pages 2401-2427, November.
    2. Jennifer Roberts & Karl Taylor, 2017. "Intra-household commuting choices and local labour markets," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 734-757.
    3. Moreno-Galbis, E., 2006. "Unemployment and endogenous growth with new technologies-skill complementarity," Economic Modelling, Elsevier, vol. 23(2), pages 364-386, March.
    4. Nathalie Georges & Yannick L'Horty & Florent Sari, 2012. "Comment réduire la fracture spatiale ? Une application en Ile-de-France," TEPP Research Report 2012-07, TEPP.
    5. Loic Du Parquet & Pascale Petit, 2019. "Discrimination à l’embauche : Ce que nous apprennent deux décennies de testings en France," Working Papers hal-02333816, HAL.
    6. Détang-Dessendre, Cécile & Gaigné, Carl, 2009. "Unemployment duration, city size, and the tightness of the labor market," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 266-276, May.
    7. Yannick L'Horty & Florent Sari, 2011. "Le grand Paris de l’emploi," TEPP Research Report 2011-13, TEPP.
    8. Harris Selod & Laurent Gobillon, 2007. "Les déterminants locaux du chômage en région parisienne," Économie et Prévision, Programme National Persée, vol. 180(4), pages 19-38.
    9. E. Moreno-Galbis & Henri Sneessens, 2007. "Low-skilled unemployment, capital-skill complementarity and embodied technical progress," Recherches économiques de Louvain, De Boeck Université, vol. 73(3), pages 241-272.
    10. Laurent Gobillon & Thierry Magnac & Harris Selod, 2011. "The effect of location on finding a job in the Paris region," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(7), pages 1079-1112, November.
    11. Di Addario, Sabrina, 2011. "Job search in thick markets," Journal of Urban Economics, Elsevier, vol. 69(3), pages 303-318, May.
    12. Yannick L’Horty & Florent Sari, 2008. "Les zones urbaines sensibles en Ile-de-France : Typologie des tensions territoriales," Documents de recherche 08-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    13. Zenou, Yves, 2009. "Search in cities," European Economic Review, Elsevier, vol. 53(6), pages 607-624, August.
    14. Eva, MORENO-GALBIS, 2004. "Unemployment and Endogenous Growth with Capital-Skill Complementarity," LIDAM Discussion Papers IRES 2004001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    15. GOBILLON Laurent & SELOD Harris, 2007. "The effects of segregation and spatial mismatch on unemployment: evidence from France," Research Unit Working Papers 0702, Laboratoire d'Economie Appliquee, INRA.
    16. Jacob, Nikita & Munford, Luke & Rice, Nigel & Roberts, Jennifer, 2019. "The disutility of commuting? The effect of gender and local labor markets," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 264-275.
    17. Yudai Higashi, 2020. "Urbanization Effects on Job Search Decision," Discussion Paper Series DP2020-26, Research Institute for Economics & Business Administration, Kobe University, revised Sep 2022.
    18. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2007. "The Effect of Location on Finding a Job in the Greater Paris Area," IZA Discussion Papers 2848, Institute of Labor Economics (IZA).
    19. Yannick L'Horty & Emmanuel Duguet & Loic Du Parquet & Pascale Petit & Florent Sari, 2011. "The effect of place of residence on access to employment : a field experiment on qualified young job applicants in Ile-de-France," Working Papers halshs-00812113, HAL.
    20. David Webster, 2019. "Benefit sanctions, social citizenship and the economy," Local Economy, London South Bank University, vol. 34(3), pages 316-326, May.

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    More about this item

    Keywords

    Job Matching; Search Intensities; Spatial Correlation;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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