Does City Structure Affect Job Search and Welfare?

Wasmer, Étienne; Zénou, Yves

doi:10.1006/juec.2001.2256

Cited by 133 publications

(131 citation statements)

References 22 publications

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“…The mechanism was first modelled by Ortega (2000) in a two-area search-matching framework. Contrary to Wasmer and Zenou (2002), the author assumes that jobs are located in two different areas (that we will interpret as a city centre and its suburbs). Workers choose in which area to search.…”

Section: Spatial Mismatch: the Workers' Perspectivementioning

confidence: 99%

The Mechanisms of Spatial Mismatch

2007

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Summary. The spatial mismatch hypothesis (SMH) argues that low-skilled minorities residing in US inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which is rather supportive of the SMH. Surprisingly, it is only recently that theoretical models have emerged, which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested. This article presents relevant facts, reviews the theoretical models of spatial mismatch, confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests.

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Section: Spatial Mismatch: the Workers' Perspectivementioning

confidence: 99%

The Mechanisms of Spatial Mismatch

2007

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“…To provide an economic mechanism for the spatial mismatch hypothesis, this literature has mostly taken the point of view of workers. If indeed workers (especially minorities) reside far away from jobs, then they have poorer information on jobs and their search e¢ciency is lower than those residing closer to jobs (see in particular Rogers [13], Seater [14], Wasmer and Zenou [18], Smith and Zenou [16]). Others have argued that black workers refuse to take jobs that involve excessively long commutes (Zax and Kain [20], Brueckner and Zenou [2]).…”

Section: Introductionmentioning

confidence: 99%

How do firms redline workers?

Zénou

2002

Journal of Urban Economics

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This Discussion Paper is issued within the framework of IZA's research area The Future of Labor. Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions.The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor, (2) internationalization of labor markets, (3) welfare state and labor market, (4) labor markets in transition countries, (5) the future of labor, (6) evaluation of labor market policies and projects and (7) general labor economics.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author. In a city where individuals endogenously choose their residential location, firms determine their spatial efficiency wage and a geographical red line beyond which they do not recruit workers. This is because workers experiencing longer commuting trips provide lower effort levels than those residing closer to jobs. By solving simultaneously for the land and labor market equilibrium, we show that there exists a unique market equilibrium that determines the location of all individuals in the city, the land rent, the efficiency wage, the recruitment area and the unemployment level in the economy. This model is able to provide a new mechanism for the spatial mismatch hypothesis by taking the firm's viewpoint. Distance to jobs is harmful not because workers have low information about jobs (search) or because commuting costs are too high but because firms do not hire remote workers. JEL Classification:J41, R14

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“…The new element here is the spatial aspect of the negotiation where the employer has to take into account the location x of workers. As in Wasmer and Zenou (2002), firms must compensate workers for the transport cost difference between the employed and the unemployed workers in order for them to accept the job offer. However, the main difference with Wasmer and Zenou is that here workers are ex post heterogenous in terms of productivity and, because of the assignment rule (7), this translates into heterogeneity in terms of distance to jobs x.…”

Section: Wage Determinationmentioning

confidence: 99%

Endogenous job destruction and job matching in cities

Zénou

2009

Journal of Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Endogenous Job Destruction and Job Matching in CitiesYves Zenou The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Endogenous Job Destruction and Job Matching in Cities *We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a city and commuting to the job center involves both pecuniary and time costs. Thus, workers with high wages are willing to live closer to jobs to save on time commuting costs. We show that, in equilibrium, there is a one-to-one correspondence between the productivity space and the urban location space since high-productivity workers bid away low-productivity workers in order to occupy locations close to jobs. We also show that in the bargaining process, there is a spatial element in the wage setting since firms need to compensate workers for their spatial costs. Compared to the non-spatial model, the unemployment rate and the reservation productivity are lower and the job-creation rate is higher because the urban space through commuting costs and land rent create additional frictions in the labor market.JEL Classification: D83, J41, J64, R14

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Does City Structure Affect Job Search and Welfare?

Cited by 133 publications

References 22 publications

The Mechanisms of Spatial Mismatch

The Mechanisms of Spatial Mismatch

How do firms redline workers?

Endogenous job destruction and job matching in cities

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