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| Author: | Brueckner, J. K. Thisse, J.-F. Zenou, Y. |
| Title: | Local labor markets, job matching, and urban location |
| Journal: | International Economic Review
2002 : FEB, VOL. 43:1, p. 155-171 |
| Index terms: | Labour markets Job search Urban areas |
| Language: | eng |
| Abstract: | The authors present a new way of modeling local labour markets by linking the space of workers' skills and the physical space of cities. The key lesson of the 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 firms's labour pool, which is inversely related to the costs workers incur in communiting and acquiring skills. The analysis shows how socioeconomic ghettos emerge as workers with poor skill matches are also those who incur the highest communiting costs. |
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