Does city structure affect job search and welfare?

Etienne Wasmer, Yves Zenou

    Research output: Contribution to journalArticle

    Abstract

    We develop a model in which workers' search efficiency is negatively affected by access to jobs. Workers' location in a city is endogenous and reflects a trade-off between commuting costs and the surplus associated with search. Different configurations emerge in equilibrium; notably, the unemployed workers may reside far away (segregated city) or close to jobs (integrated city). We prove that there exists a unique and stable market equilibrium in which both land and labor markets are solved for simultaneously. We find that, despite inefficient search in the segregated city equilibrium, the welfare difference between the two equilibria is not so large due to differences in commuting costs. We also show how a social planner can manipulate wages by subsidizing/taxing the transport costs and can accordingly restore the efficiency.

    Original languageEnglish (US)
    Pages (from-to)515-541
    Number of pages27
    JournalJournal of Urban Economics
    Volume51
    Issue number3
    DOIs
    StatePublished - Jan 1 2002

    Fingerprint

    job search
    welfare
    worker
    commuting
    costs
    market equilibrium
    efficiency
    land market
    wage
    labor market
    cost
    trade-off
    market
    city
    Job search
    Workers

    Keywords

    • Job matching
    • Transportation policies
    • Urban land use

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Urban Studies

    Cite this

    Does city structure affect job search and welfare? / Wasmer, Etienne; Zenou, Yves.

    In: Journal of Urban Economics, Vol. 51, No. 3, 01.01.2002, p. 515-541.

    Research output: Contribution to journalArticle

    Wasmer, Etienne ; Zenou, Yves. / Does city structure affect job search and welfare?. In: Journal of Urban Economics. 2002 ; Vol. 51, No. 3. pp. 515-541.
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