How do firms redline workers?


Zenou, Yves (2002) How do firms redline workers? Journal of Urban Economics, 52, (3), 391-408. (doi:10.1016/S0094-1190(02)00526-0).

Download

Full text not available from this repository.

Description/Abstract

In a city where individuals endogenously choose their residential location, firms determine their spatial efficiency wage and a geographical red line beyond which they do not recruit workers. This is because workers experiencing longer commuting trips provide lower effort levels than those residing closer to jobs. By solving simultaneously for the land and labor-market equilibrium, we show that there exists a unique market equilibrium that determines the location of all individuals in the city, the land rent, the efficiency wage, the recruitment area and the unemployment level in the economy. This model is able to provide a new mechanism for the spatial mismatch hypothesis by taking the firm's viewpoint. Distance to jobs is harmful not because workers have low information about jobs (search) or because commuting costs are too high but because firms do not hire remote workers.

Item Type: Article
Related URLs:
Keywords: spatial mismatch, recruitment area, efficiency wage, distance to jobs
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33376
Date Deposited: 15 May 2006
Last Modified: 27 Mar 2014 18:20
Contact Email Address: y.zenou@soton.ac.uk
URI: http://eprints.soton.ac.uk/id/eprint/33376

Actions (login required)

View Item View Item