Why do Black Workers Search Less? A Transport-Mode Based Theory

Yves Zenou

No 6155, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a search matching model in which blacks and whites are totally identical, except for the fact that they use different transport modes. We find that whites, who use faster transport modes (i.e. cars) than blacks (who use public transport), do search more intensively and extensively, and experience lower unemployment rate. Indeed, when deciding their optimal search intensities, all workers trade off short-run losses with long-run gains. However, because they use a faster transport mode, white job-seekers anticipate that they can reach jobs located further away so they can increase their maximal distance of search. This, in turn, induces firms to create more jobs, which finally motivate white workers to search more because of better opportunities. We also show that whites obtain higher wages. Indeed, in our model, each worker negotiates his/her wage with the firm using the Nash-bargaining rule. Because white workers have better outside options than blacks since their labour market tightness as well as the maximal distance of search are higher, they obtain a higher wage.

Keywords: Ethnic minorities; Job search; Multiple job centres; Spatial labour markets (search for similar items in EconPapers)
JEL-codes: D83 J15 J64 R1 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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