Efficiency wages, involuntary unemployment and urban spatial structure. (In: Recent Advances in Urban Economics and Land Use: a Special Issue in Honour of Hiroyuki Yamada)


Zenou, Yves and Smith, Tony E. (1995) Efficiency wages, involuntary unemployment and urban spatial structure. (In: Recent Advances in Urban Economics and Land Use: a Special Issue in Honour of Hiroyuki Yamada). Regional Science and Urban Economics, 25, (4), 547-573. (doi:10.1016/0166-0462(95)02100-9).

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Description/Abstract

A labor market model is developed within an urban spatial context, where it is shown that efficiency-wage policies can lead to significant levels of involuntary unemployment. Commuting cost differences between workers and nonworkers tend to increase unemployment, and competition for land tends to segregate workers and nonworkers, with nonworkers relegated to the urban fringe. These findings are extended to a two-city system, where it is shown that even with free mobility of workers, significant wage and unemployment differentials can exist between cities characterized by different levels of productivity.

Item Type: Article
ISSNs: 0166-0462 (print)
Related URLs:
Keywords: efficiency wages, unemployment, labor markets
Subjects: H Social Sciences > HT Communities. Classes. Races
H Social Sciences > HD Industries. Land use. Labor
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33079
Date Deposited: 13 Dec 2007
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/33079

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