TY  - RPRT
        AU  - Wasmer, Etienne
AU  - Zenou, Yves
        TI  - Equilibrium Search Unemployment with Explicit Spatial Frictions
        PY  - 2005/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1465
        UR  - https://www.iza.org/index.php/publications/dp1465
        AB  - Assuming that job search efficiency decreases with distance to jobs, workers’ location in a city depends on spatial elements such as commuting costs and land prices and on labour elements such as wages and the matching technology. In the absence of moving costs, we show that there exists a unique equilibrium in which employed and unemployed workers are perfectly segregated but move at each employment transition. We investigate the interactions between the land and the labour market equilibrium and show under which condition they are interdependent. When relocation costs become positive, a new zone appears in which both the employed and the unemployed co-exist and are not mobile. We demonstrate that the size of this area goes continuously to zero when moving costs vanish. Finally, we endogeneize search effort, show that it negatively depends on distance to jobs and that long and short-term unemployed workers coexist and locate in different areas of the city.
        KW  - local labour markets
KW  - relocation costs
KW  - search effort
KW  - job matching
        ER  -