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How Local Are Labor Markets? Evidence from a Spatial Job Search Model

Alan Manning and Barbara Petrongolo

American Economic Review, 2017, vol. 107, issue 10, 2877-2907

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 competition from other job-seekers. 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.

JEL-codes: J61 J64 R23 R58 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.20131026
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Related works:
Working Paper: How local are labor markets? Evidence from a spatial job search model (2017) Downloads
Working Paper: How Local Are Labour Markets? Evidence from a Spatial Job Search Model (2011) Downloads
Working Paper: How local are labor markets? Evidence from a spatial job search model (2011) Downloads
Working Paper: How Local Are Labor Markets? Evidence from a Spatial Job Search Model (2011) Downloads
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