Everybody needs good neighbors? Labor mobility costs, cities and matching

Wouter Torfs and Liqiu Zhao

Regional Science and Urban Economics, 2015, vol. 55, issue C, 39-54

Abstract: We develop an assignment model for a city with central and suburban labor markets connected by commuting. We show that not all workers benefit from the agglomeration economies created by the dense central business district. Low-skilled workers in the suburban district are worse off by being close to the dense central business district. High-skilled workers gain more from the urban scale. The existence of labor mobility costs induces only high-skilled workers in the suburbs to commute to the central business district, which results in a decrease in the local contact efficiency for the left-behind low-skilled workers. The empirical evidence from a Belgian linked employer–employee dataset confirms this novel finding.

Keywords: Job search; Assortative matching; Match quality; Labor mobility costs; Selection (search for similar items in EconPapers)
JEL-codes: J24 J64 R12 R23 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:55:y:2015:i:c:p:39-54

DOI: 10.1016/j.regsciurbeco.2015.08.005

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