Urban Labor Economics

by Yves Zenou

• ISBN13: 9780521698221
• ISBN10: 0521698227
• Format: Paperback
• Copyright: 2009-04-27
• Publisher: Cambridge University Press

Summary

This book studies the links between urban economics and labor economics. Different models of urban labor economic theory are examined in the initial two parts of this book: first urban search-matching models and then urban efficiency wages. These models are then used to analyze urban ghettos and their consequences for ethnic minorities in the labor market. Professor Zenou first provides different mechanisms for the so-called spatial mismatch hypothesis, which postulates that housing discrimination introduces a key frictional factor that prevents minorities from improving access to job opportunities by relocating their residences closer to jobs. He then explores social networks, which tend to be affected by spatial factors, as workers who are physically close to jobs can be socially far away from them. Based on these models, the author offers different policies aiming at fighting high unemployment rates experienced by ethnic minorities residing in segregated areas.

Author Biography

Yves Zenou is Professor of Economics at Stockholm University and a Senior Research Fellow at the Research Institute of Industrial Economics (IFN). He is also affiliated with the Groupe d'Analyse des Itineraires et Niveaux Salariaux (GAINS, Le Mans, France), the Center for Economic Policy Research (CEPR, London), and the Institute for the Study of Labor (IZA, Bonn). He is editor of Regional Science and Urban Economics and associate editor of the Journal of Urban Economics. His publications have appeared in leading journals such as Econometrica, Review of Economic Studies, Journal of Economic Theory, International Economic Review, and the Journal of Labor Economics.

Table of Contents

Preface and Acknowledgments	page xi
Introduction	p. 1
Urban Search-Matching	p. 7
Simple Models of Urban Search-Matching	p. 10
Introduction	p. 10
The Benchmark Model	p. 11
Search Effort as a Function of Distance to Jobs	p. 30
Endogenous Search Intensity and Housing Consumption	p. 42
Discussion	p. 58
Notes on the Literature	p. 62
Extensions of Urban Search-Matching Models	p. 65
Introduction	p. 65
Workers' Heterogeneity in Training Costs	p. 67
Endogenous Job Destruction	p. 74
Positive Mobility Costs	p. 88
Very High Mobility Costs	p. 96
Wage Posting	p. 104
Notes on the Literature	p. 118
Non-Monocentric Cities and Search-Matching	p. 121
Introduction	p. 121
Rural-Urban Migration and Search	p. 123
Job Matching and Search in Multicentric Cities	p. 132
Job Matching and Assignment in a System of Cities	p. 143
Notes on the Literature	p. 163
Urban Efficiency Wages	p. 167
Simple Models of Urban Efficiency Wages	p. 171
Introduction	p. 171
The Benchmark Model	p. 172
Endogenous Housing Consumption	p. 183
Open Cities and Resident Landlords	p. 190
City Structure	p. 195
Long-Run Equilibrium with Free Entry	p. 203
Endogenous Unemployment Benefit	p. 206
Notes on the Literature	p. 210
Extensions of Urban Efficiency Wage Models	p. 212
Introduction	p. 212
Effort as a Function of Distance to Jobs	p. 213
Effort and Leisure	p. 221
High Relocation Costs	p. 229
Effort, Leisure, and Relocation Costs	p. 239
Notes on the Literature	p. 245
Non-Monocentric Cities and Efficiency Wages	p. 248
Introduction	p. 248
Rural-Urban Migration: The Harris-Todaro Model with a Land Market	p. 249
Migration between Cities of Different Sizes	p. 255
Migration within Cities: Dual Labor Markets in a Duocentric City	p. 264
Endogenous Formation of Monocentric Cities with Unemployment	p. 286
Notes on the Literature	p. 297
Urban Ghettos and the Labor Market	p. 301
The Spatial Mismatch Hypothesis: A Search-Matching Approach	p. 309
Introduction	p. 309
Access to Job Information	p. 310
Different Entry Costs	p. 319
Different Transport Modes	p. 330
Notes on the Literature	p. 346
The Spatial Mismatch Hypothesis: An Efficiency-Wage Approach	p. 347
Introduction	p. 347
The Firms' Perspective	p. 348
The Workers' Perspective	p. 354
A More General Model	p. 367
Notes on the Literature	p. 375
Peer Effects, Social Networks, and Labor Market Outcomes in Cities	p. 376
Introduction	p. 376
Social Networks as Externalities	p. 379
Social Networks as Dyads	p. 395
Social Networks as Explicit Graphs	p. 404
Discussion	p. 419
Notes on the Literature	p. 421
General Conclusion	p. 423
Basic Urban Economics	p. 427
The Basic Model with Identical Agents	p. 427
The Basic Model with Heterogenous Agents	p. 447
Poisson Process and Derivation of Bellman Equations	p. 453
Poisson Process	p. 453
An Intuitive Way of Deriving the Bellman Equations	p. 457
A Formal Way of Deriving the Bellman Equations	p. 459
The Harris-Todaro Model	p. 462
A Simple Model with Exogenous Wages	p. 462
The Harris-Todaro Model with Minimum Wages	p. 467
The Harris-Todaro Model with Efficiency Wages	p. 470
The Harris-Todaro Model with Urban Search Externalities	p. 476
Bibliography	p. 481
Author Index	p. 501
Subject Index	p. 506
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