Efficiency Wages, Urban Unemployment and Housing Consumption

Yves Zenou

No 4153, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The aim of this Paper is to introduce endogenous housing consumption in an efficiency wage model in which two cases are considered: very high and zero relocation costs. First, in both cases, we are able to totally characterize the efficiency wage for any preferences that are quasi-linear with respect to the composite good consumption. Second, in each case, we show how endogenous housing consumption affects the value of the efficiency wage (compared to the case of fixed housing consumption) and demonstrates the existence and the uniqueness of a steady-state equilibrium. Finally, we compare the two models and show how mobility costs affect the efficiency wage setting.

Keywords: Relocation costs; Location-dependent wages; Urban labour markets (search for similar items in EconPapers)
JEL-codes: J41 R14 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-geo, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Efficiency Wages, Urban Unemployment and Housing Consumption (2003)
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