Local labor markets, job matching and urban location

Brueckner, Jan K., Thisse, Jacques-Francois and Zenou, Yves (2002) Local labor markets, job matching and urban location. International Economic Review, 43, (1), 155-171. (doi:10.1111/1468-2354.t01-1-00007).


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We present a new way of modeling local labor markets by linking the space of workers' skills and the physical space of cities. The key lesson of our analysis is that firms exploit workers in these two spaces by setting wages that are below the competitive level. The degree of monopsony power depends on the elasticity of the firm's labor pool, which is inversely related to the costs workers incur in commuting and acquiring skills. Our analysis thus shows how socioeconomic ghettos emerge as workers with poor skill matches are also those who incur the highest commuting costs.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1111/1468-2354.t01-1-00007
ISSNs: 0020-6598 (print)
Related URLs:
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33070
Accepted Date and Publication Date:
Date Deposited: 15 May 2006
Last Modified: 31 Mar 2016 11:59
URI: http://eprints.soton.ac.uk/id/eprint/33070

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