Labour-market search and urban residential structure

The application of labour market matching theory to the context of urban spatial variations in vacancies, unemployment, and job search has recently begun to receive research attention. Empirical analysis is very difficult because of the virtual unobservability of job search. Various forms of theoretical study of spatial labour markets are summarised in this paper, together with macroeconomic empirical evidence on labour matching technology. The Cobb-Douglas form of the matching function is applied to a simple linear city model, and theoretical relationships are derived which would be necessary for a static urban labour market equilibrium. A start is made on the theoretical implications of calculating an optimal job search area for individual workers, and a complex integral form of a present value function is obtained.