Matching, centrality and the urban network

Benoît Schmutz-Bloch and Modibo Sidibé

Journal of Urban Economics, 2024, vol. 144, issue C

Abstract: We propose a search and matching model of the urban network. When geography is fixed and the job finding rate decreases with distance, the interplay between firm entry and worker migration generates an equilibrium allocation in which productive agents cluster in a few large central cities where matching is more assorted and profitable, while many small peripheral cities retain low-skilled workers. Counterfactual experiments suggest that (i) small transfers to the periphery hurt everyone, while large transfers can achieve a more efficient, decentralized organization; (ii) lower frictions deconcentrate the network and benefit everyone.

Keywords: City size distribution; Centrality; Local labor market; On-the-job search; Migration (search for similar items in EconPapers)
JEL-codes: J2 J3 J6 R1 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:144:y:2024:i:c:s0094119024000767

DOI: 10.1016/j.jue.2024.103706

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