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Job Search and Migration in a System of Cities

Author

Listed:
  • Benoit Schmutz

    (CREST, Howard University)

  • Modibo Sidibé

    (CREST, Duke University)

Abstract

We build an equilibrium job search model, where workers engage in both off- and on-the-job search over a set of cities, to quantify the impact of spatial matching frictions and mobility costs on the job search process. Migration decisions, based on a dynamic utility trade-off between locations, can rationalize diverse wage dynamics as part of forward-looking spatial strategies. Our estimation results allow us to characterize each of the largest 200 French cities by a set of city-specific matching and amenity parameters and to measure the impact of distance on spatial constraints. We find that after controlling for frictions, mobility cost parameters are significantly lower than previously reported in the literature. Additional results include a robust positive correlation between on-the-job arrival rates and local wage dispersion, which provides new empirical support to the wage-posting framework and suggests an alternative explanation for the city size wage gap.

Suggested Citation

  • Benoit Schmutz & Modibo Sidibé, 2014. "Job Search and Migration in a System of Cities," Working Papers 2014-43, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2014-43
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    local labor market; frictions; on-the-job search; migration;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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