Unemployment Dispersion and City Configurations: Beyond the Bid Rent Theory

Vincent Boitier ()
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Vincent Boitier: UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Paris 1 Panthéon-Sorbonne

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Abstract: In the present article, I provide a simple urban theory where agents do not bid for land. In absence of this baseline mechanism, I show that the spatial allocation of agents is governed by a Nash equilibrium. I underline the role of asymmetric local congestion effects in insuring the existence and the uniqueness of such an equilibrium. I then use this new framework to account for spatial variation in unemployment within big cities. Namely, applying this setting in an urban search model, I demonstrate that the obtained framework can generate a large number of new city configurations in which the local unemployment rate behaves differently. I also determine conditions for which each configuration may appear. I finally prove, the existence and the uniqueness of a labor market equilibrium for each urban pattern and I draw a link between the latter and the allocation of workers throughout space.

Keywords: Segregation; Bid rent theory; Matching models; Local congestion effects; Unemployment dispersion (search for similar items in EconPapers)
Date: 2014-06-03
New Economics Papers: this item is included in nep-lab and nep-ure
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