Local Labour Markets, Job Matching and Urban Location

Jan K. Brueckner (), Jacques Thisse () and Yves Zenou ()

No 2612, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We present a new way of modelling local labour markets by linking the space of workers' skills and the physical space of cities. The key lesson of our analysis is that firms exploit workers in these two spaces by setting wages that are below the competitive level. The degree of monopsony power depends on the elasticity of the firm's labour pool, which is inversely related to the costs workers incur in commuting and acquiring skills. Our analysis thus shows how socioeconomic ghettos emerge as workers with poor skill matches are also those who incur the highest commuting costs.

Keywords: Imperfect Labour Markets; Spatial Mismatch; System Of Cities (search for similar items in EconPapers)
JEL-codes: J42 J61 R14 (search for similar items in EconPapers)
Date: Written
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Journal Article: Local Labor Markets, Job Matching, and Urban Location (2002)
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