How local are labor markets? Evidence from a spatial job search model

Alan Manning and Barbara Petrongolo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper models the optimal search strategies of the unemployed across space to characterize local labor markets. Our methodology allows for linkages between numerous areas, while preserving tractability. We estimate that labor markets are quite local, as the attractiveness of jobs to applicants sharply decays with distance. Also, workers are discouraged from searching in areas with strong job competition from other jobseekers. However, as labor markets overlap, a local stimulus or transport improvements have modest effects on local outcomes, because ripple effects in job applications dilute their impact across a series of overlapping markets.

Keywords: job search; local labor markets; place-based policies; ripple effect (search for similar items in EconPapers)
JEL-codes: J61 J63 J64 R12 (search for similar items in EconPapers)
Date: 2017-10-01
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 (116)

Published in American Economic Review, 1, October, 2017, 107(10), pp. 2877-2907. ISSN: 0002-8282

Downloads: (external link)
http://eprints.lse.ac.uk/78492/ Open access version. (application/pdf)

Related works:
Journal Article: How Local Are Labor Markets? Evidence from a Spatial Job Search Model (2017)
Working Paper: How Local Are Labour Markets? Evidence from a Spatial Job Search Model (2011)
Working Paper: How local are labor markets? Evidence from a spatial job search model (2011)
Working Paper: How Local Are Labor Markets? Evidence from a Spatial Job Search Model (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:78492

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