TY  - RPRT
        AU  - Zenou, Yves
        TI  - How Do Firms Redline Workers?
        PY  - 2002/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 607
        UR  - https://www.iza.org/publications/dp607
        AB  - 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.
        KW  - distance to jobs
KW  - efficiency wage
KW  - recruitment area
KW  - spatial mismatch
        ER  -