A model is considered in which optimal search intensity is a result of a trade-off between short-run losses due to higher search costs (more interviews, commuting, etc.) and long-run gains due to a higher chance of finding a job. We show that this optimal search intensity is higher in areas characterized by larger cost of living and/or higher labor market tightness. This model is then tested for England on a panel of sub-regional data. Controlling for unobserved heterogeneity between areas and other endogeneity issues, both the local cost of living and the local labor market tightness are found to have a positive and significant effect on jobless average search intensity.
|Number of pages||22|
|Journal||Regional Science and Urban Economics|
|Publication status||Published - 1 Mar 2006|
- Job matching
- Panel data
- Search intensities