Spatial distribution of public service, spatial sorting, and labor market

Xiaozhong Yang, Fusheng Xie and Guanpu Li

Research in International Business and Finance, 2025, vol. 75, issue C

Abstract: This study aims to demonstrate the impact of the spatial distribution of public services on the labor market. By incorporating urban space into a search-matching framework, we found two patterns of spatial sorting: completed and mixed spatial sorting. In completed spatial sorting, employed workers live in the city center and unemployed workers live in the suburbs, whereas in mixed spatial sorting, short-term unemployed workers live in the city center, long-term unemployed workers live in the far suburbs, and employed workers live in intermediate areas. When suburban public services decline, market tightness and search intensity increase, thereby decreasing unemployment rates and wages. The inconvenience of suburban transportation facilities increases search intensity, reduces unemployment rate, and decreases wages.

Keywords: Public service; Labor market; Search intensity; Spatial sorting (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:75:y:2025:i:c:s0275531925000510

DOI: 10.1016/j.ribaf.2025.102795

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