A model of why people do not move between local labor markets is developed by means of a set of concepts derived from the job search and contracts literature. Emphasis is placed on how the environment, in which individuals behave, determines outcomes. It is argued that individuals act rationally, but that in a world of inequality rational behavior can reinforce disequilibrium and the perpetuation of spatial-economic inequality. A hypothetical example of two local labor markets is used to illustrate our argument.
Get full access to this article
View all access options for this article.
References
1.
AzariadesC, 1975“Implicit contracts and underemployment equilibrium”Journal of Political Economy831183–1202
2.
BailyMN, 1974“Wages and employment under uncertain demand”Review of Economics and Statistics4137–50
3.
BarroRGrossmanH, 1976Money, Employment and Inflation (Cambridge University Press, New York)
4.
BarthPS, 1971“A time series analysis of layoff rates”Journal of Human Resources6448–465
5.
BellmanRE, 1957Dynamic Programming (Princeton University Press, Princeton, NJ)
6.
BlinderAS, 1974Towards an Economic Theory of Income Distribution (MIT Press, Cambridge, MA)
7.
BurdettKMortensenD, 1980“Search, layoffs, and labor market equilibrium”Journal of Political Economy88652–672
8.
ClarkGL, 1981a“A Hicksian model of labor turnover and local wage determination”Environment and Planning A13563–574
9.
ClarkGL, 1981b“The employment relation and spatial division of labor: A hypothesis”Annals, Association of American Geographers71412–424
10.
ClarkGLGertlerM, 1983“Local labor markets: Theories and policies in the United States during the 1970's”The Professional Geographer (forthcoming)
11.
ClarkKBSummersLM, 1979“Labor market dynamics and unemployment: A reconsideration”Brookings Papers on Economic Activity number 2, 13–60
12.
DavidPA, 1973“Fortune, risk, and the microeconomics of migration” DP-274, Department of Economics, Harvard University, Cambridge, MA
13.
DunlopJ, 1950Wage Determination Under Trade Unions (Augustus M Kelley, Fairfield, NJ)
14.
FeldsteinMS, 1975“The importance of temporary layoffs: An empirical analysis”Brookings Papers on Economic Activity number 3, 725–744
15.
GlasgowDG, 1981The Black Underclass: Poverty, Unemployment and Entrapment of Ghetto Youth (Vintage Books, New York)
16.
HallRE, 1980“Employment fluctuations and wage rigidity”Brookings Papers on Economic Activity number 1, 91–123
17.
HicksJR, 1932The Theory of Wages (MacMillan, London)
18.
KaleckiM, 1971Essays on the Dynamics of Capitalist Economies (Cambridge University Press, Cambridge)
19.
KeeleyMC, 1977“The impact of income maintenance on geographical mobility: Preliminary analysis and empirical results from the Seattle and Denver income maintenance experiments” RM-47, Stanford Research Institute, Menlo Park, CA
20.
McCallJJ, 1970“Economics of information and job search”Quarterly Journal of Economics84113–126
21.
OiW, 1962“Labor as a quasi-fixed factor”Journal of Political Economy70538–555
22.
OiW, 1976“Residential location and labor supply”Journal of Political Economy84S221–S238
23.
ParsonsDO, 1977“Models of labor market turnover: A theoretical and empirical survey”Research in Labor Economics1185–224
24.
PioreMJ, 1979“Conceptualization of labor market reality” in Manpower Research and Labor Economics Eds SwansonGMichaelsonJ, (Sage, Beverly Hills, CA)
25.
PissaridesC, 1916Labor Market Adjustment: Microeconomic Foundations of Short-run Neoclassical and Keynesian Dynamics (Cambridge University Press, New York)
26.
ReesASchultzGP, 1970Workers and Wages in an Urban Labor Market (Chicago University Press, Chicago, IL)
27.
RothschildMStiglitzJE, 1970“Increasing risk: A definition”Journal of Economic Theory2225–243
28.
SchellingTC, 1978Micromotives and Macrobehavior (W W Norton, New York)
29.
SchultzTW, 1980“Nobel lecture: The economics of being poor”Journal of Political Economy88639–651
30.
SimonH, 1951“A formal theory of the employment relationship”Econometrica19293–305
31.
ViscusiWK, 1976“Adaptive models of job search” DP-80, Public Policy Program, John F Kennedy School of Government, Harvard University, Cambridge, MA
32.
von NeumannJMorgensternO, 1944Theory of Games and Economic Behavior (Princeton University Press, Princeton, NJ)
33.
WilliamsonO, 1975Markets and Hierarchies (Free Press, New York)
