Chapter 39 Urban labour markets

The large research literature in urban labour market analysis is reviewed, with the emphasis ranging from attempts to model aggregate simultaneous interactions between residential and workplace location to more modern econometric work researching individual labour market behaviour. The job search process is central to the operation of the labour market, yet research is hampered by variable data availability and the limited observability of the search mechanism. Individual responses to major employer relocations have been recently studied, especially the substitutability of the move or quit decision, and relationships to race and gender. The variation of commuting patterns by income and professional status has also been analysed, and the functioning of the dispersed service-dominated modern urban labour market raises challenging research issues including willingness to search and commute over substantial areas, interacting with family circumstances and expected job security. The continued growth in all developed economies of female labour force participation and numbers of female-headed households have raised the importance of urban labour market research focusing on gender, including the economic understanding of patterns in the length of the female journey to work. Study of the influence of racial segregation on outcomes in the urban labour market has a longer history, with the “spatial mismatch hypothesis” having developed a large literature since the 1960s. With higher quality microdata and modern computational power and econometric techniques, statistical research has advanced considerably. Similar spatial relationships between race and labour market and commuting outcomes are also intrinsic to the European urban labour market, and have received particular attention from British, Dutch, Austrian and French researchers. The chapter concludes with an overview of contrasts between inter- and intraurban labour market adjustment processes.